Month: May 2023

Pessimism & F.I.R.E. – A Little Goes A Long Way

I have a secret to share with you… I think that a little bit of pessimism goes a long way towards achieving financial independence. When most of us start working, we’re chipper and happy and excited to be getting a paycheque. It’s lovely to have some spending power! And most of us use that power as quickly as we can. Sometimes, that results in huge debts that chain us to a paycheque. By the time many of us have lost faith that we will one day work at something we love, the financial obligations that were picked up along the way keep us tethered to employment. Without another source of money to replace our paycheque, we’re essentially stuck.

No one ever talks about this aspect of adulting in their graduation speeches… Those speeches are flowery and encouraging, and urge graduates to pursue their dreams. That’s fine and good and great if you can do it. However, I do wish someone could work in a nugget or two about building up some money on the side… just in case you’re among the unfortunate multitudes who won’t have the opportunity to do what you love and receive a handsomely large paycheque for doing it. But I digress…

Take some time to seriously ponder how much life-satisfaction you anticipate receiving from paid employment. Doing so is a powerful catalyst. I can almost guarantee that you will be motivated to pursue financial independence sooner rather than later. It takes a few years, but we all eventually realize that not everyone who works hard gets rewarded. There are those who aren’t good at office politics, and have no desire to expand their skill set in that area. Unfortunately, some people are the victims of harassment and bullying in the office. These are the main reasons why it’s a seriously good idea to add a drop of pessimism to your views on saving for the future.

It won’t hurt to consider what your options will be if you decide that you hate working and that you want to stop doing whatever it is that you’re paid to do. How will you pay for your life without an employer giving you a paycheque? Do you want to work even harder than you do now by starting your own business? Or would you prefer enough passive income to fully fund you the life you dream of? Maybe you’d enjoy the combination of a lower-paying-yet-absolutely-enjoyable job that’s bolstered by passive income from your investments?

Now, there’s always the possibility that you’re like a couple of my friends who absolutely love their careers. Like everyone, they have bad days at work but, for the most part, they love going to work. Read that again – they love going to work. They would do their jobs for free – that’s how much they love going to work!

It’s mind-boggling to me. Even when I loved my job, I never loved it that much. And over time, my like for my job has dwindled considerably. Many accolades and much credit should be given to Young Blue Lobster. Twenty year ago, YBL knew that working to 65 wasn’t a prominent dream for our life. YBL quickly paid off student loans, a car loan, and a mortgage. YBL stayed out of debt and re-directed those former debt payments to savings that were eventually invested in our TFSA, our RRSP, and our non-registered investments. Even before locating the F.I.R.E. corner of the internet, YBL was pursuing financial independence and funding our dream of retiring early.

At the time, YBL had an inkling that having a salary-replacing cashflow on the side would be a very good thing just in case anything went wrong with the regular paycheque. Looking back, I have to say that YBL was 100% correct. Our little army of money soldiers bolsters my investment contributions every month. In a year or two, those monthly dividend payments will exceed the contributions from my paycheque. That’s not too shabby as far as financial achievements go. Without that little sliver of pessimism fuelling my decisions way back when, my current side income would be meagre.

I want you to pursue your dreams. You’ve got one life and it should be the best one that you can achieve. At the same time, a touch of pessimism can help you to focus on how you can best make those dreams come true. Pessimism… a little goes a long way.

One Year From Now

Quick question for you… How much closer will you be to fulfilling your dreams one year from now? Have you set a budget for making those dreams come true?

Time moves faster than anyone realizes. We’re nearly done with the 5th month of 2023 already! That went by fast. And the next year is going to go by just as fast. When May of 2024 rolls around, what will you have done to fund your dreams?

In the highly unlikely event that you don’t already have a plan to pay for the costs of making your dreams a reality, allow me to suggest cash stuffing. Back in my day, this was called the envelope-method. Like they say, everything old is new again. Today, people have brought this practice back to life.

Cash stuffing is the practice where people give every dollar a job before the money is spent. It’s a cash-based way of moving through the world. People allocate every physical dollar of their paycheques to various envelopes contained in wallets and use those dollars to pay for their expenses. Each wallet contains multiple plastic envelopes and each wallet has a theme. One wallet is day-to-day expenditures, such as groceries, gas, utilities. Another wallet might be for short-term goals – things like travel, weddings, extra-curricular fees. There’s probably a wallet for little indulgences like self-care and leisure. Other wallets are for charitable donations, retirement funds, pet-care, and various savings challenges. The number of envelopes and themes for the various wallets is only limited by the owners’ imagination.

I like to think of the wallets are representations of their owners’ personal priorities. After all, it’s the owner who determines how much physical money goes into each envelope whenever a paycheque comes their way. The wallets’ envelopes have money-targets. Let’s say the owner plans to save $4,000 for travel. Once the envelope reaches that target, the envelope is withdrawn from the wallet and the contribution formerly allocated to travel is re-directed to another envelope.

Do yourself a favour right this instant. Open another tab on this browser then go to YouTube and search for “cash-stuffing”. Many, many, many videos will pop up in your search results. Personally, I really enjoy Intentional Living and Canadian Girl Cash Stuffer. I’ve no doubt that you will find someone whose style of cash stuffing best matches your preferences. Personally, I find it soothing to watch strong, competent hands carefully stuffing numerous envelopes, then condensing those same bills later on for a significant, 4-figure bank deposit. The entire time, a voice is in the background explaining what the purpose of each allocation and when it will be used.

Did I mention that you can have envelopes for retirement? Should you decide to try this method of money management, never forget the needs of Future You. In short, one of your wallets should hold envelopes for your RRSP, your TFSA, and one for your non-registered savings.

It should also go without saying that you need an envelope for your emergency fund. There is an emergency in your future. You don’t know when it’s going to show up, but you can certainly take steps today to get financially ready for its arrival.

The other aspect of cash stuffing that I absolutely love is that it prevent people from going into debt. Those who are committed to only spending the available cash don’t use credit cards. Since they’re never borrowing money on their credit cards, they’re never going into debt. It’s a wonderful method for people to live below their means.

I spend a lot of time persuading you to turn your dreams into your reality. So I ask your again. One year from now, how much closer will you be to realizing your dreams?

We only get one life to live and I honestly believe it should be the best life it can possibly be. Most dreams come with a price tag. There’s some kind of financial component to all of them. You should pay just as much attention to the money-side of things as the other stuff that goes into making your dreams come true.

Eating Your Way to Wealth

It’s long been my belief that there is money to be made in the kitchen. Maybe you start a profitable food blog like Delish D’Lites, or maybe you bake cakes for weddings as a side hustle. For most of us, the money-saving magic of the kitchen comes from eating most meals at home and packing lunches/snacks for the office. I like to think of this as the eating your way to wealth option. You have to eat, but that doesn’t mean you can’t get wealthy while doing so.

When I got my first Grown-Up job twenty-odd years ago, I knew that one of the hallmarks was buying coffee and a muffin every morning before work. There was also a mid-morning coffee, eating lunch at a nearby restaurant or kiosk, and an afternoon coffee. It was a lot of money. Granted, back then I was only paying $1 or $1.50 for each coffee… yet I was earning less than a third of what I earn now. Everything’s relative, right?

After a few years of eating so much food away from home and learning about FIRE, I decided to eat breakfast in my own kitchen every morning. It took a few years, but now I rarely ever go to the coffee shop before starting my day. Once breakfast was under my belt, I started cooking more dinners at home so I’d have leftovers for lunch the next day. That switch took a much longer time to make, much to my surprise. However, I’m doing a lot better.

Back in 2014, I found a darling neoprene lunch bag in a souvenir shop and couldn’t stop myself from buying it. As silly-looking as mine is, I happily fill it with my mid-morning snack and something tasty for lunch then carry it with me to and from the office every day.

I’ll go to my grave believing that cooking my own food and taking it with me to the office has helped me get into the Double Comma Club. Now, I’m not trying to convince you that eating from my own kitchen was the most important part of my Make-Blue-Lobster-Wealthy Plan. It wasn’t, not by a long shot! Staying out of debt and turning my former mortgage payments into investment contributions for the past 15+ years were the main drivers underpinning the success of my plan. If I had to guess, I’d say that maybe 15% of my success came from eating my own food. The money that was spent at grocery store went a lot farther than it would have if I’d spent it in restaurants and fast-food places.

Being the First Born Daughter of My Mother means that I make up a lot of my own recipes. I call them head-recipes. I don’t really write them down, which is too bad. No matter how delicious one of my head-recipes is, I know that I’ll never taste it the same way again because I never write down how much I use of any particular ingredient. It’s different every time. Lasagna, brussel sprouts, hamburgers, and meat sauce immediately come to mind. Every time I make these, they taste slightly different than the last time. One of my favourite head recipes to mix leftover rice with golden raisins and walnuts, then heat it up the microwave for 60-90 seconds. Delicious!

It pains me to admit this but it took me years to learn how to make pancakes. One day, I was walking down the grocery aisle and saw box after box of frozen waffles and pancakes. I realized that if a pancake could be mass-produced and frozen, there was no reason why I couldn’t make them for myself. (For the record, my parents did make pancakes but only very occasionally. We were more of Cream of Wheat family when I was growing up.

However, there are other recipes that I never would have created in my wildest dreams. In case you’re curious about what I’ve been eating over the years, here’s a list of a few of the recipes I’ve found online and have made more than once. They’re my go-to’s when I’m doing meal prep on the weekends, or when I’ve offered to bring a dessert or appetizer to a potluck or a party.

Here are some of my favourite recipes that came from online sources:

Eating your way to wealth is one of the best ways to get there. If you can’t cook, start small. Toast and peanut butter is not hard. You don’t need to “know how to cook” to operate a toaster. Get up a few minutes earlier and have breakfast before you leave for work. Myself, I like instant coffee but my mother and best friend swear by their French press machines. Bottom line, drink your first cup of coffee of the day at home. The same applies to tea.

Lunch is the next logical meal to master in your kitchen. Sandwiches aren’t hard to make, nor are they cumbersome to transport. Get yourself a lunch bag and start filling it with food for the day. When you make dinner, ensure there’s enough prepared for leftovers. I enjoy a good lasagna every now and then. One lasagna leads to 10-12 meals, depending on the size of each portion. I don’t eat it for days on end. I have some for dinner and some for the next day’s lunch, but the rest is frozen and put in the freezer for another time. Most pastas in meat or tomato sauces will freeze beautifully and make for delicious meals.

You can eat extremely well in your own home. Take the time to learn how to feed yourself. It will taste so much better than most of what you can buy through the drive-thru. You deserve to eat your way to wealth, so start today!

Just Start Today

This is going to be a short post. I want you to start funding your dreams today.

Yes. Today. Start today. Don’t wait until tomorrow. If you’re reading this post on your computer or your phone or your tablet, then you’re capable of going to your bank and opening an account. Or you can go to a different bank and open an account. It truly doesn’t matter.

Open the new account. Set up an automatic transfer to fund the new account. Start with a $1 per day. That’s a weekly transfer of $7, or a bi-weekly transfer of $14. If $1/day seems ridiculous, then start with $5/day. Again, that would be $35 per week or $70 every two weeks. Again, the choice of how much to transfer every day is yours but you have to start today.

If you’ve been here for any length of time, you know that I like to preach that you should identify your priorities first. I’m starting to waver on that. Priorities are extremely important, but many people have a lot of trouble identifying what they hold most dear. If you’re a person who doesn’t know what they want, then you should still be saving and investing your money. It might take you 5 years to figure out what you really want, and that’s okay. Waiting 5 years to start saving and investing is not okay. That’s 5 years of time that you will never get back. It’s better that you’re saving and investing while also trying to figure out what you want.

Start today… even if you don’t know everything. You’ll learn along the way. Personal finance isn’t too hard for to you learn. You can learn as much as you want and at your own pace. Once the automatic transfer is in place, you’ll be setting aside money on a regular basis. As you learn more, you’ll make more informed choices for your money. You’ll grow confident in your ability to make wise decisions with your cash. Don’t wait until you feel that you’ve “learned it all” before you start saving and investing. Speaking from personal experience, I can assure you that you will never feel that you’ve learned everything there is to know.

The better route is to start today, never stop learning, and put what you learn into practice. As you know better, you’ll do better.

No one has ever regretted having a little money set aside. Life will throw challenges your way. Having money in the bank means that you can deal with the financial side of those challenges with a certain amount of ease. The time to build the ark is before it starts to rain. So just start today. Open the account – set up the transfer – keep learning about yourself and what you want your money to do for you. That’s it. Everything else is details.