Apr 252018
 

My experience working under Jeff Bezos, indirectly.

As many of you know I held a full time job for a month after my layoff in February. This company is the online retailer, Amazon. ūüôā I was a warehouse associate at an Amazon Fulfillment Center. It was a lot of fun! And I’ll never forget the lessons I learned there.

But I quit after a month because I wanted to spend more time pursuing other job opportunities. Besides, I was feeling a lot of pressure because my company’s CEO is literally the wealthiest man on the planet, and I didn’t want to risk disappointing him. Amazon founder Jeff Bezos is currently worth about $115,000,000,000 – give or take a few billion dollars! ūüėģ¬†Wow that’s a big number. And for a brief moment of my humble existence I was granted the privilege of working indirectly with him. ūüėÄ

Although I didn’t work directly under him, he was only 7 management levels above me. So if I had kept working and be promoted just 7 times I would have easily taken his job as CEO. ūüėČ

What Jeff Bezos taught me about business

During my short tenure with Amazon it was clear that Jeff’s influential principles and management style trickled all the way down the corporate ladder to the employees working on the ground floor.

I believe Amazon’s¬†Prime ūüė鬆reason for success is Jeff’s unique management style. He operates the leanest company I have ever seen. Any workplace inefficiency or redundancy, no matter how insignificant, will be eliminated as soon as it is found. From the workers picking and packing to the automated labeling machines and conveyor belts, everything in the warehouse operates like clockwork. ūüôā The impressive logistics system has to manage over 100 workers, moving and sorting 50,000+ items every day.

Consistency is important. All the managers at Amazon have to mimic the same disciplined style of leadership as set by Jeff. This is apparent across all levels of the company. That’s not to say Amazon is all work and no play. They have a well stocked break room, as well as a leisure area with video games, table tennis, and comic books. Amazon’s¬†workplace policies are firm, but fair.

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Dec 222016
 

Outgrowing The¬†“Middle Class” Label¬†

Hello high-income earning friends! It’s been a few years since I’ve written¬†about my income from a holistic point of view. So for the sake of transparency I thought I would give everyone an update on my income situation.

My salary is currently closer to $60,000 than it is to $50,000. I won’t disclose the exact figure¬†because I work with people who read this blog. As for my side incomes, they have gone up as well. ūüôā¬†I’m leaving out rental income below because I use the rent to pay my farmland mortgage¬†so it’s basically a wash.

Gross side incomes per year.

  • Part time job – $10,000
  • Dividends – $8,000
  • Interest – $3,000
  • Freelance – $10,000

Total side incomes = $31,000/year

If we put all the numbers together we see that I am making in the rough range of $90,000. Sweet sassy molassy! I believe this means my income is no longer considered middle class anymore. I am now part of the trendy upper middle class. ūüėČ

In any case, I’m earning more than $75K/yr, which is a very important psychological hurdle. According to the Wall Street Journal, the magic income level for maximum satisfaction is $75,000 a year. “As people earn more money, their day-to-day happiness rises. Until [they]¬†hit $75,000. After that, it is just more stuff, with no gain in happiness.”

Retiring Early on a Modest Salary

It’s rare for graphic designers such as myself to ever earn a six figure salary. What this means is that I have to implement a different strategy for FI/RE than someone else who’s a doctor or engineer. To make up for a lower salary, I boost my earnings by moonlighting,¬†and also by increasing my investment returns by taking on more calculated risks. The extra income streams essentially increase my income by $31,000 a year right now and should continue to grow over time. They should also make¬†the eventual transition to retirement easier. And by using leverage to invest in¬†growing companies and other profitable¬†assets like farmland and high yield bonds, my total portfolio has continuously brought high¬†returns since 2009.

This method of choosing individual investments is admittedly more risky than the passive, Boglehead market indexing strategy. But I’ve also been compensated with higher returns, at least so far. I can’t say this plan is guaranteed to work for everyone or that it’s sustainable long term. But I started investing in my early 20s. Today I’m almost 30 years old, and my passive income is about $1500 per month, while my expenses are about $3000. So it’s working out for me. The only issue is I don’t know how my leveraged portfolio will perform in a bear market or recession, which hasn’t been tested yet.

I believe in the next 12 to 24 months it’s very likely that I will be making $100,000 per year including all my income sources. Wow. Never in my wildest childhood dreams did I expect to earn so much. I know six figures isn’t what it used to be but it still feels like a huge amount of money to me.

Many other high income earners¬†claim that they don’t feel $90K or $100K is a lot of money. I don’t know if they’re just being modest, but I certainly do¬†feel much more privileged and happier¬†now than many years ago¬†when I earned only $40K.

16-12-liquid-income-update

I used to believe that you have to be smart to make a lot of money. But apparently I’m living proof that someone with an average intellect can do so as well. I modelled my financial plan based on the brilliant minds that have already figured out the formula for success.¬†All of my investment ideas and strategies can be boiled down to one simple philosophy; Do what other successful people do. ūüôā That’s it!

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Mar 142016
 

I think believing in superstitions is bad luck. But bad things can happen to anyone. So one way to deal with unexpected situations is to be like Batman and have a contingency plan for everything. ūüôā I’ve recently updated my stress test page to reflect my current financial situation, which¬†has improved since last year. A¬†stress test removes uncertainty and doubt about our finances¬†so we can sleep better at night. ūüėČ

A Worst Case Scenario

Just for fun I have created a hypothetical worst case scenario to see if my finances could survive it. Consider the following events.

The economy contracts. People panic. The Canadian real estate bubble bursts and prices drop by 40%. Stock markets also fall 40%. Jobless claims skyrocket. I get laid off from both my jobs on the same day without notice. On my way to the employment insurance office I get T-boned by a distracted driver and my car is written off. The next day a devastating 7.5 magnitude earthquake hits Vancouver hard. My apartment building suffers heavy structural damage and is deemed unsafe to live in.

16-03-vancouver-earthquake-damage

Okay, so things may look bad on the surface. But it’s actually fine, because the whole point of creating a stress test is to protect ourselves against these unlikely what if scenarios.¬†I may be frustrated¬†after all the unfortunate events, but at least I’ll still be okay financially. ūüôā Here’s how things would play out:

  • My¬†combined severance package would be about $10,000 of after-tax income, enough¬†for 3 months of living expenses.
  • I would qualify for employment insurance benefits.
  • My dividend stocks would¬†continue to pay out regular distributions like they did during¬†the last recession.
  • I have a stash of gold and silver in case I need emergency cash.
  • Auto insurance will cover the¬†car accident.
  • Earthquake insurance would cover the damage to my apartment. Strata owners¬†would¬†hold meetings with the property manager to discuss how to move forward using 3/4 votes as per the bylaws. The insurance company would pay¬†our housing costs if we have to relocate somewhere else temporarily.

Luckily my finances would appear to still hold up through all the turmoil. I would have plenty of time and liquidity to get back on my feet.

How to Stress Test your Finances

Step 1: Make a list of all the risks, uncertainties, or potential issues that could effect your money or financial lifestyle.

For example:
Job loss, flooding, rising interest rates, upcoming major purchases, etc

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Aug 302015
 

Sunshine Blogger Award Nomination

I’ve been recently nominated for a blogging award by roadmap2retire. Thanks R2R. ūüôā The person being tagged has to share some information about themselves, based on the questions posed by the person nominating. Let’s begin.

1. Name the top three experiences from your past, that help form who you are today. 

  • In the past I’ve played a handful of online role-playing games like Runescape. You earn money by doing jobs and spend money on food, and weapons to make your character stronger. It taught me the basic principles of economics and the importance of saving up to buy expensive things – useful skills I still use today. ūüėÄ I don’t play them anymore because they are a huge time sink, lol.
  • I started investing in 2009, when the markets were on sale. The S&P 500 stock market index is 140% higher now than in 2009 so it’s hard to lose money investing over this period. I’ve never experienced a bear market before and have no idea how I would react in the middle of one. My lucky timing has given me an unrealistic expectation towards long-term investing.
  • I worked at Safeway making $8.50/hr when I was a teenager. My boss at the time told me he was once in my shoes and worked his way up to become the manager. I learned that it doesn’t matter who you are or where you start from. Anyone can become successful if they try hard enough. This belief gave me the confidence to pursue early retirement and start this blog. If I had continued to work at Safeway I’d probably be a mid-level manager today and earn $60,000 a year.

2. If you have one piece of advice for investors starting out, what would it be?

  1. Have a purpose for your investments so you can find the appropriate assets to put into your portfolio. Investing isn’t scary if you understand what you own, and know why you own it.

3. What was your worst investment so far in your life? How do you avoid making the same mistakes?

I spent $7,000 on university tuition and never even graduated. I enrolled because it’s the socially acceptable thing to do for young adults. I enjoyed the university¬†experience, but the applied sciences program I was in has nothing to do with my career now. Today I practice purposeful financial management. I only spend or invest money if I believe there is a good reason for me to do so, not because everyone else is doing it. ūüėõ

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Jul 252015
 

As a blogger, I sometimes feel cold, probably because I’m surrounded by so many drafts. ūüėÄ One draft I’ve been meaning to publish is today’s post, which is about my blogging income. I like to be¬†upfront about the money I¬†make from side hustles. Regular readers will know I earn about $10K a year from rent, $6K from dividends, etc. Recently my online income has grown to the point where I feel like I should address it. So in the interest of transparency I’d like to share a bit about my online income. The tl;dr version is that I make about $500 a year blogging.¬†Details below.

I started monetizing Freedom 35 about 3 years ago. Prior to that the blog didn’t¬†make any money. I usually spend around 5 hours a week blogging, generally writing 2 posts per week. So in terms of hourly rate it appears my¬†writing efforts make a jaw-dropping $1.92 per hour, haha. ūüôā¬†Just to be clear this post is not about how to make money online, or how to monetize a website. There’s no shortage of experts out there who claim to have the secret sauce to build a successful online empire. But the main purpose of this post¬†is to provide disclosure to readers.

15-07 what do personal finance bloggers do and what people think they do

My blog’s main source of revenue comes from Google Adsense. It allows me to¬†place ads like the ones on¬†the right side of this page. These ads earn about $20 to $25 a month. ūüôā Due to the Terms of Service agreement with Adsense I can’t show all the details of my earnings. But here’s a quick peek at my performance from a screenshot I took last month.

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