Retirement, What Retirement?

Wouldn’t be amazing to never retire?

For the past 15 years, I’ve worked in the financial industry. For the past 15 years, I’ve been told to prepare for my retirement. I’ve been told the best thing in life is to get a job that provides a good pay check, social benefits and… a fully funded retirement pension plan.

When I finished my bachelor degree in finance and marketing, I thought I had hit the jackpot starting to work in the financial industry. The job was interesting, the pay check was good and, the fully funded retirement pension plan was available.

Fast forward 15 years later, I still work in the same industry, I love my job, the pay check has gotten bigger and the fully funded pension plan is still there. However, changes in the retirement plan last year make me impossible to retire before the age of 65 without suffering from a penalty. Therefore, I have another 32 years to work before I can enjoy a comfortable retirement. At the age of 65, I will earn 70% of my income until the day I pass away. This sounds like the jackpot for many… but it got me wondering:

What if I don’t make it until 65?

What is left to enjoy at that age?

How about never retiring, but starting to live today instead?

 

How I Destroyed my Retirement Plan and Will Never Retire

After asking myself these questions, there wasn’t much for me to do besides buying a lotto ticket and hoping to win the lottery and retire in my 30s. We all know this is not going to happen. Therefore, I need another plan. Since I’ve studied retirement planning, I know it takes 2 very important ingredients to make this recipe a success:

#1 Savings lots of money

#2 Lots of time to make the magic of compounding interest work for you

Being a father of three and wanting to enjoy life right now, I lack both the money and time to complete my retirement recipe. There must be another option…. A viable option where I can stop working at my day job and start living.

Instead of working on my retirement plan, I decided to destroy my plan and never retire. This is what the building of a strong sideline enabled me to do. I created my online sideline back in 2006. In 2008, I started to make enough money with my sites so my wife could quit her job and take care of the kids. This happened in 2009. Then, my business model failed (thx to Google!) back in 2012 and I was back to covering my cost of operation but not much money was left. Since January, we are making money again with our websites and I now hope to make a living online starting in 2016. But in order to do so, I needed another kind of plan.

Instead of working on my retirement plan, I’m working on my financial freedom plan

 

My Financial Freedom Plan

Financial freedom sounds like retirement, but just sooner. In fact, the point of being financially free for me means to not have to work for someone else and be able to live an inspiring life. You don’t have to make millions to do so, but you must change your spending habits! Here’s my plan to reach financial freedom in 12 months from now:

 

#1 Downsize everything

You probably already know about my RV project. Next year, I will become debt free, have roughly 50K in cash, 60K in my RRSP and another 75K or so worth of pension plan. With a net worth around 200K (my RV is still worth something! Hahhaha!), this is not enough to be financially free. However, the fact that I don’t have any payments and will live in my RV for a year makes my living budget for a family of 5 closer to $2,000-$2,500 per month. With such a frugal budget, I can expect to reach financial freedom faster.

 

#2 Create a sustainable source of income

I’m already working very hard on that. My websites are generating a profit and I expect them to generate over $3,000/month in profit next year. This is how I will be able to take care of my family during my RV trip but I will also not touch my savings. I expect to start increasing my saving half way through my trip, when I will leave the USA for Central America. At that point, my website earnings should surpass my monthly needs and I should be able to increase my savings.

 

#3 Grow my savings rate

I plan on doing something special; at the moment my lifestyle will be covered by my websites, the remaining will automatically be saved. Therefore, If I can increase my profit to $6,000 per month, I will continue living small and put $3,000 aside in savings. Once I return home, I would like to have close to $75,000 in cash (the $50,000 + my savings + some investing profits).

 

#4 Not making the same mistakes again

Leaving for a year is the easy part of my plan. This will automatically force me to become a minimalist and live frugally. However, how can I make sure I don’t fall into the same hole once I come back? This is the tricky question. My plan at the moment is to buy a rental property with my 75K and keep my cost of living to $0. If I can buy a Triplex and have the two renters pay for my mortgage, I will continue to be financially free and be able to keep saving money.

My second option would be to invest this money in another business. Therefore, I could continue working on my website and manage a bigger business. I know that several boomers are looking to sell but it’s hard to find someone with cash in hand to buy a business. I want to find something that will drive me and make me want to work harder each day.

My third option would be to go back to my previous job and keep my minimalist habits. I’m not sure it’s feasible to be honest. Going back to my old job, would lead me to going back to my old spending habits as well. I’m afraid to do so. Still, this would be like my worst case scenario and it seems pretty interesting anyways!

I will continue to work day and night for the next 12 months, so I could possibly grow my business enough to start saving at the same time as I start my trip. This would be the perfect case scenario, don’t you think?

 

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