I Quit My Job (And New Adventures to Come)

Exciting news! Approximately two weeks ago I met with my supervisor and gave him notice that I am quitting my job. I should be officially off the books next week.

The best part... I've got absolutely no new job lined up to hop into and have no desire to work another job. But my wife and I have a new adventure planned for our future.

For the several thousand readers who don't know me personally, I have worked in law enforcement for the past nine years. I've had a broad range of experience in the field, working positions ranging from a patrol officer to traffic enforcement to bylaw enforcement to animal control. This means I've headed up investigations into everything from unsightly properties to serious dog attacks to armed robberies.

The experience of law enforcement was life-changing for me. Some countries have military conscription; I believe prosperous countries should seriously consider encouraging their graduates to serve in law enforcement for a few years. Law enforcement will teach you more about human behaviour than any other career I can think of.

However, after nine years my heart wasn't in law enforcement anymore. I think I am probably too independent for the hierarchical structure of the law enforcement world. While the work can be interesting and I worked with many great people on the front lines, the bureaucracy gets tiresome and the policies and procedures are increasingly inhibiting.

By watching our spending, working hard, and successful investing, my wife and I have built a pretty substantial financial cushion and this is a great opportunity for us to do something completely different with our lives. As I always say, this journey is about freedom.

The Future

While I haven't made any serious efforts to find new things to occupy my time for monetary gain going forward, my wife and I have made plans for a huge shift in our lives.

In August 2019 we will be moving overseas to Hanoi, Vietnam. We hope to live there for several years and use it as a base to discover eastern Asia. We've never been there before; in fact, I've never been west of coastal British Columbia. But we've heard a tonne of great things about Vietnam and Hanoi, particularly from friends who have visited there.

The people are supposed to be wonderful, cost of living is low, and Hanoi has much more comfortable weather than other cities in the region like Saigon, Bangkok, Jakarta, or Kuala Lampur.

On the financial side, taxes on stock investments in Vietnam can be as low as 0.1 percent per sell-side transaction. This means I will change a few things in my portfolio, but my investing should become simpler and much more tax friendly in the long run. However, I will take a bit of a tax hit as I will likely be taking money out of RRSP accounts at some point down the road.

My wife, an elementary school teacher, has taken a position with a prominent American school in Hanoi. She's very excited to work with a new curriculum and enter the world of expat international schools.

Her new school is making the transition to Hanoi extremely easy. With their help we've already secured a furnished apartment, got our visas in order, and are getting a full tour of Hanoi and everything we need to know when we arrive. We are also coming into a community of individuals with similar interests.

Once things get settled (likely in the middle of August), you may see some changes around the blog. I might take up more writing, dive deeper into some of the portfolios I work with, do some consulting, and start a regular newsletter.

I'm always open to new ideas from readers, so please contact me if you have some thoughts on where I should spend my time and further develop the blog.

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A Base for Taking Risks

On my blog I talk a lot about investing in the stock markets and assuming risk in exchange for positive returns over time. In this world, things can feel advanced and overwhelming very quickly. Particularly for newer readers.

While it is fun to explore the deep dives of investment strategies and better ways to invest, sometimes we forget about the basics. A base for investing—being in a position where we can take risks.

I often get emails from newer investors who will ask questions about the various investing styles I explore. (And some that I don't.) Is Dual Momentum a good choice for them? Should they stick with static index investing instead? Is adding leverage to a portfolio too aggressive for them?

While I enjoy the interaction, it is always difficult to answer these emails. I'm not a professional financial advisor and don't hold myself out to be one. I'm a regular guy who is interested in the markets, is moderately well read when it comes to investing, have experienced some decent success, and am continuously learning myself.

But more importantly, everyone's personal situation is different. A retiree who needs stability and tax-friendly income requires a different portfolio from my own. Someone who is starting out but has a shaky job and a lot of debt is also in a much different category of responsible risk taking.

Speaking from personal experience, my ability to invest carefully with appropriate risk and the right mental mindset was advanced when my personal financial situation stabilized. It is very tough to invest properly when cash is low, money is tight, and debt is high.

When I had little money and a big mortgage, I was tempted to go for home runs, treating investing little different from a lottery ticket. The problem is these big wins rarely happen. In the worst cases the more likely large losses can scare a person away from the markets forever.

Very few people get rich with 5x, 10x, or 100x baggers on risky forms of investing (penny stocks, cryptocurrencies, options, etc.). Even fewer stay rich.

Sticky wealth is wealth amassed carefully and methodically over a long time with a lot of hard work.

A Firm Foundation

Like everything else in life, investing begins with a firm foundation. Before taking on risk and putting money into the markets, have everything else in your financial world tightened up.

Pay off debt. Debt is a major financial risk factor today. Way too many people carry enormous debt loads that bog them down. Deep down, most regret the choices that led them into debt. I cannot emphasize enough how important it is to buckle up and do everything in your power to pay off debts. Take a second job, work overtime, live with mom and dad or in a low-cost roommate situation, spend nothing, sacrifice, do whatever it takes.

Never invest if you are carrying credit card debt or have personal loan or an unsecured line of credit balance. Paying these debts off aggressively can provide you with a guaranteed after tax return of 7 to 25 percent. It can also save you a huge amount of stress.

That said, a modest mortgage is okay to carry while investing. Your interest rates are likely to be low and the payments should not be overwhelming.

Cut expenses. Having low living expenses can provide substantial peace of mind. It is also likely to simplify your life. While a million websites will moan about spending on lattes and avocado, the best places to save money are the big expenses.

Downsizing your house, going down to one (or none) fuel efficient vehicle, getting rid of pricey toys like motorbikes or ATVs, selling the vacation cabin or time-share, and taking modest vacations are perfect ways to live better and save money. Way too many people have no money but think it is normal to live like millionaires. It's not.

Earn a decent income. It doesn't need to be a huge six figure take. In Canada I peg the healthy number at C$70,000 gross per year. In the U.S. this could be closer to $50,000. That's only a bit above average for a full-time skilled worker. In some areas of the country it will need to be higher, in others the number can be lower.

Many younger people follow the herds into Toronto, Vancouver, San Francisco, LA, NYC, or Seattle. For most a much better bet is a city like Edmonton, Winnipeg, Montreal, Dallas, Atlanta, Charlotte, or Phoenix. Or the hundreds of very livable smaller cities with low cost-of-living. You would be amazed how location can drastically improve your odds of building wealth and financial independence.

Save money. This is a big one and is the culmination of the prior three points. You should be in a situation where your monthly income consistently exceeds your monthly expenses. Nothing is worse for your portfolio than being in a situation where you put in a dollar and pull out 50 cents two weeks later.

This includes investing for financial independence but pulling money out to "invest" in a kitchen upgrade or "invest" in more reliable car. Investing is for the long-term. It should be kept completely separate from saving for a larger purchase, even if that purchase adds a bit of value to your home.

Build a cash cushion. I like to maintain a decent cash balance in our chequing account. Depending on the time of month, when income comes in and expenses go out, our chequing account will bounce from around $3,000 to $7,000. This provides a nice cushion to cover any spending needs without worrying about overdraft or credit card balances.

We use credit cards for most daily spending to defer the bill for up to a month and a half. Free short-term loans, free purchase protection, and free travel rewards are awesome! But I make sure I can pay it off in full every month.

I'm not a big fan of maintaining large emergency funds because odds are you will never need to use them if you manage your finances properly. Instead, get a personal line of credit set up at your bank. Don't use it unless you are in a financial emergency. Save and invest the rest of your money so it is working for you, not the bank.

Risk and Investing

When most people think about risk and investing, they focus on how risky their investments are. They might even dwell on the risk of losing money when investing—a virtual guarantee at some point in everyone's investing journey.

I prefer to look at the entire picture of risk. This includes investing but it adds in your personal situation (which in many ways is more important). A commissioned real estate salesperson is in a much riskier situation than a power lineman at the utility company. Even if the sales lady drives a BMW and wears nice clothes (or maybe because of that).

A shaky relationship with one very spendy partner is much riskier than a stable partnership of two frugal individuals. A family with a large house and a large mortgage is much more fragile than a family that rents a smaller house or rowhouse.

These ideas extend to a multitude of other factors: high debt compared with no debt, dual versus single income families, old versus young, kids or no kids, level of flexibility in pursuing the best work opportunities, renting or owning, biking and the occasional Uber versus multiple vehicles. The list goes on.

A young, dual income, no debt, apartment renting, no child, biking couple has the capability of taking on high leverage in their portfolio while still being lower risk overall. Flip the situation and invest in GICs and you are still setting yourself up for a major financial wipeout.

Set yourself up for success in your personal situation. Then let the markets do the rest of the work.

Comments & Questions

All comments are moderated before being posted for public viewing. Please don't send in multiple comments if yours doesn't appear right away. It can take up to 24 hours before comments are posted.

Comments containing links or "trolling" will not be posted. Comments with profane language or those which reveal personal information will be edited by moderator.