I quit my day job! Here’s what I’m doing next

Retiring from my long term career

Today is the first day of the rest of my life.

I have been working at various 9 to 5 jobs for the last 14 years. But no more.
June 28th was officially my final day at work. πŸ™‚

So now I’m officially out of the workforce. And I couldn’t be happier. πŸ˜„

It’s always a bitter sweet moment when you leave the job you enjoy.
But I think I have made the right decision.
I know 14 years doesn’t sound like a long time for many people. But as a millennial it’s a large chunk of my life.

There are various definitions of retirement. I like to use the most common one which is quitting one’s job and leaving the workforce.

Thank you everyone for following along on my journey first to financial independence, and now to retiring from my 9 to 5 job. πŸ˜€

Oprah Winfrey said we become what we believe.
So when I created this blog over a decade ago I believed I could retire by age 35.

Oprah was right. πŸ€—

I no longer dread Mondays because everyday feels like a weekend now! πŸ₯³

In an era when most millennials are living paycheck to paycheck, it sure is a tremendous privilege to be able to live on a stable stream of passive income for the rest of my life. 😊

 

What I will be doing now

It’s incredible to have an extra 40 hours every week. And I do not intend to waste a minute of it!

I’m afraid to just sit on my hands all day because I’ll probably lose feelings in my fingers.
And then I’ll really be out of touch. 😎

That’s why I will keep myself busy with fun activities that will primarily fit into 2 categories.

The first is purely for fun, such as reading comic books or watching Netflix. πŸ™‚

The other is to improve my long term health, relationships, or financial stability.

Everything else I can simply ignore at this point and focus on developing the things that are important to me.

So for the next little while I plan to enjoy activities such as sleeping in, cooking, and chilling at home.

In terms of side projects I don’t have anything I want to take on right now.

But that’s what my free time is for. It’s hard to think clearly with a busy mind and a full schedule. But a calm mind with no time constraint is more open to discover new and interesting ideas. πŸ™‚

Who knows? Maybe I’ll write a book, start a business, adopt a puppy, or plant a vegetable garden in my backyard. I don’t plan to do any of that right now. But they’re all possible ideas I can revisit years or even decades later. I am in no rush to start anything new. After all. I already have an abundance of the most valuable asset. Time. πŸ˜‰

That’s it for what I plan to do. Now onto the household finances and making sure the numbers still work despite the bear market! πŸ˜€

 

Investments at a glance

Here’s how my investments look right now.

I have a total of roughly $2 million worth of investments.

About half of my investments are in real estate. I have 2 investment condos. Both are cash flow positive.

The remaining ~50% contains stocks, bonds, cryptocurrencies, etc.

Associated with these investments are loans.
My total mortgage balance and margin debt outstanding is $650,000.

This means the equity I have in my investments is worth $1,350,000.

I expect this figure to increase over time as I slowly pay down the debt while the asset side increases over time.

 

Household budget (income and expense)

Here are all the income sources we have now in retirement:

  • Net cash flow from rental income = $2,800
  • TFSA withdrawal = $1,000
  • Taxable account withdrawal = $3,000
  • RRSP withdrawal = $1,000

Total monthly income = $7,800

This withdrawal strategy is based on my video explaining the best way to drawdown a portfolio while minimizing income tax across time. I have tweaked the strategy a bit to compensate for current economic conditions.

I’m glad I was able to come up with this withdrawal plan before leaving the workforce. This is useful when it comes to planning for my long term financial needs and tax implications.

Am I concerned to withdraw money from my investment accounts when the stock market has fallen by so much this year? Not at all. πŸ™‚ This was a scenario that was built in to my retirement plan.

And the $3,000 monthly withdrawal from my taxable account will not be from selling stocks, but from borrowing on margin debt. The reason is so I can capture all the upside of the next bull market when stocks eventually start going up again.

This is called the buy and borrow method, which is a much better way to manage your finances than just buying and selling. πŸ™‚ Rather than offloading stocks in the decumulation stage of life you simply hold onto your investments forever.

Here are all our household expenses:

  • Housing = $5,500 (mortgage payment + property tax)
  • Groceries = $500
  • Utilities = $400
  • Transportation = $150
  • Interest charges = $150
  • Fun money = $200
  • Estimated income tax = $600

Total monthly spending = $7,500

I have included tax liability into the budget to get a more accurate picture of our total cost of living. The tax amount is again based on that video I made before and the estimated tax bracket I will be in.

Based on these calculations our income should be able to cover all our expenses.
In fact, we actually have a $300 monthly surplus for unexpected cost overruns. πŸ™‚

Does spending $7,500 per month make us chubby FIRE or is it still within the boundaries of regular FIRE?

You tell me. πŸ™‚

 

Is this enough?

You might think a $300 monthly surplus is cutting it close. What if we run into an emergency and need to come up with $10,000? These scenarios are accounted for in my plan. I increased my home equity line of credit borrowing room before I quit work so now I have access to a lot more money than before.

If there’s anything I’ve learned from my financial journey is that you can’t plan out every detail of your retirement because things will change beyond your control. And the best way to deal with finances in retirement is to think of your retirement plan as a process, not a closed ended plan.

Re-evaluate your goals and priorities each year, just as you would if you were still working. And make adjustments accordingly. The best investment plan is one that can easily adapt to changing circumstances over time. πŸ™‚

Also…

 

Additional income sources

I actually have other income streams that are unaccounted for in the budget above.

One is a retirement package that pays me about $2,000 per month on average for the next 1.5 years. This is a combination of severance, built up vacation time, and employment insurance benefits. This should provide a smooth transition from earning a full time salary to nothing.

So from now until the end of 2023 our household income will actually be $9,800 per month before dropping back down to $7,800. But a lot can happen between now and then. πŸ™‚

I also plan to continue trading options. Spending just an hour with options each month typically produces $1,000 or more of additional income. It doesn’t take too much time and the hourly rate is hard to pass up.

I have left out these two income sources in my official retirement calculations because they’re either temporary, or require active management, whereas I would prefer my retirement income to come from permanently passive sources. So any income I do earn from my severance package or options trading will probably be invested back into my investment portfolio for growth and future use. πŸ˜€

And in case anyone is wondering, I do not make any money from running this blog. There aren’t any ads here. And I’m also not making money from my YouTube channel. In order to qualify for its partner program and run ads the channel requires 1,000 subscribers and 4,000 hours of watch time per year. And my videos only receive about 3,200 hours per year, lol. I do have over 1,000 subscribers now though so at least one of the requirements is met. Yay!

Thanks to everyone who has subscribed to my channel.

Although I do have thousands of followers on social media services like Twitter and Facebook I don’t monetize them at all either. I’m pretty good with money, but I suck at marketing myself, lol.

 

My hurdle rate

What would it take for me to continue working?

Right now I value my time at $200 per hour.

So if I don’t get an offer for that price I won’t do it. There are exceptions of course. If Pixar offers me a job as a story boardartist because they like my stick figure drawings I would probably bend my rate a bit for them, lol.

Everyone will have a different hurdle rate. But generally speaking the more wealthy you are, the more you will value your time, and the higher your hurdle rate will likely be.

Since I’m financially independent, I don’t need additional money to live the lifestyle I want.

However, I will consider working and paying more for an even more comfortable life.
For example, let’s say I want to fly business class instead of economy and it will cost me an extra $4,000.

Since my hurdle rate is $200 I am okay taking on a 20 hour contract so I can enjoy a business class seat on a plane. πŸ™‚

It seems like more and more people are realizing that their time is more important than money.

This is why we’re seeing the Great Resignation across the world.

I expect my rate to go up over time. Have you thought about what your hurdle rate would be? If you’re working now do you think your rate will change once you retire? Just some fun questions to think about. πŸ™‚

 

Drawdown expectations

I expect my net worth to increase, at least during the first 40 years of retirement, before fall after I turn 75 years old.

It shouldn’t be a surprise to see a portfolio grow as someone enters into retirement. In fact, that is what happens most of the time. The idea of running out of money in retirement has been excessively inflated to scare people.

Statistically if you retired with $1 million and withdraw 4% of your portfolio each year, your chance of ending up with $4 million after 30 years is higher than your chance of having less than $1 million. This is according to financial planning Michael Kitces. It’s surprising to realize your chance to 4 times your original nest egg is so high.

The data says 5 out of 6 retirees will die with more money than they started with at the beginning of their retirement. So I am not worried about running out of money.

 

Preventing awkward conversationsΒ 

A common issue people face when they reach early FI status is describing what they do to others in social situations.

So if anyone asks I will simply tell them I am a financial analyst. πŸ™‚

It’s technically true. I analyze the financial markets to make appropriate decisions.

Financial analyst is a wide, catch-all role that could involve investing, budgeting, and general capital allocation.

This way I don’t have to explain to strangers how I’m retired from my day job, but manage a 7 figure investment portfolio. It’s too personal and not relatable anyway.

 

Why leave the workforce now in 2022?

Here are some reason why I have decided to quit my job.

  1. I just finished working on a major 2 year project. So now is a good time to leave the industry. It’s bad karma to leave in the middle of a project, especially when team members rely on each other.
  2. June is when my employer pays out the annual bonus. So to be honest I was waiting to receive the bonus before leaving my job. πŸ˜…
  3. I turned 35 a few months ago. And I think it fits the spirit of this blog’s name to quit working at this age.
  4. We’re welcoming a new member to our household and I want to stay home to look after the family and brush up on my dad jokes. πŸ˜‰

 

Here is a snippet from my very first blog post on this site 12 years ago.

 

It’s been an unbelievable journey. I’ve learned so much about personal finance and connected with so many amazing readers and bloggers along the way!

I will continue to make weekly blog posts and YouTube videos to keep everyone updated on what I’m up to with my finances. πŸ™‚

As always, thank you for reading. πŸ˜€

______________________________________
Random Useless Fact:

The U.K. is currently facing the hottest day on record.

 

Author: Liquid Independence

Editor in Chief at Freedom 35 Blog.

Subscribe
Notify of
guest
78 Comments
Inline Feedbacks
View all comments
RICARDO
RICARDO
07/18/2022 7:55 am

Congrats on your FIRE at an early age. You will be one of the few with more time ahead of them in retirement rather than more time in a work environment.
$7.5K spend is really high but only because of the mortgage. Get rid of that and you are home free (excuse the pun).

RICARDO

Karen
Karen
07/18/2022 8:53 am

Congrats on reaching FIRE! It’s been fun following your journey, and I’m so happy you’ve reach your goal! Best of luck with expanding the family!

Jenny
Jenny
07/18/2022 9:22 am

Congratulations on all fronts! Your journey to FIRE has been amazing and an inspiration. I can only hope to emulate you! Best of luck to your growing family! =D

Brian
Brian
07/18/2022 10:42 am

Congrats I’ve been following your blog since the beginning. It makes me happy to see you succeed!
What I find incredible is that 81% of your budget goes towards housing and taxes!
It just goes to show what a high cost of living country Canada is!

Chris
07/22/2022 6:37 am
Reply to  Brian

I would edit that comment Brian to say, high cost of living in Vancouver, not Canada.

Congrats on the jump to FIRE Liquid, hard work on your plan will treat you well in the next stage of life.

Brian
Brian
07/23/2022 8:55 am
Reply to  Chris

look up Canada vs Sweden, UK, Japan and many other high cost of living countries on the webite “numbeo” you’ll be shocked to see that Canada is now significantly more expensive than all or most of them.

I don’t live in Vancouver or Toronto and have friends who live all over the world with whom I compare prices with and 90% of the time it’s most expensive here.

Karim
Karim
07/18/2022 1:05 pm

This is so amazing. Big congrats! Your “plan” for retirement sounds perfect.

flea
flea
07/18/2022 6:37 pm

Congrats! This is so awesome to read. I’ve been silently following you when you purchased your first farm land in Sask.

I have a question about your withdrawal strategy.

1) how do you do the buy and borrow method with a marginal account? Usually, the account requires you to cover margin position first before withdrawing any funds.

2) when you don’t have employment income anymore, do you plan to withdraw more rrsp?

GYM
GYM
07/18/2022 7:20 pm

Congrats!!!

Boy, you will be surprised how little free time you will have once your little one comes along haha!! It’s like a 12 hour job every day and then there are night time interruptions and then you are so tired to even focus on anything else productive. I know your wife is there too help too but even with two parents highly involved it is tiring.

Then when they start to talk back and run around it’s even more tiring than the baby phase lol!!

How is your grocery spending only $500 a month? That’s pretty good!

Tawcan
Tawcan
07/18/2022 7:27 pm

Congrats Liquid! Pretty amazing stuff.

Sleeping in with a little one? Ha good luck with that lol.

Brett
Brett
07/19/2022 5:00 am

Congrats! I retired at 41. I get up earlier now, I wake up very day at 530am for a workout (when I’m not making excuses) and I play a sport most days to stay fit. It’s easy to find time now to plan adventures.

Stephanie O'Dea
07/19/2022 6:19 am

I’m so happy and proud of you!! I’ve been following along with great interest.
I look forward to reading about your retirement days.
πŸ™‚

Tim
Tim
07/19/2022 6:49 am

It has been GREAT watching your journey and learning a few things along the way. My one hope is that you don’t completely disappear and check in with us from time to time!!

Enjoy shifting gears and the time you can now spend with family, friends, and passion project.

I’m still working on that balance, but I enjoy my career yet so I’m keeping it going. I’m planning to reevaluate the end of 2024 after all of my stock awards are vested.

cheers !!

ArtlukM
ArtlukM
07/19/2022 10:20 am

Congratulations on the early retirement and the expanding family!! I’ve been a silent reader for the past 4 years and have had a great time following along on your financial journey, from farmlands to options.

Coincidentally, I was reading a post about retiring early from Financial Samurai and wanted to see what you thought and how some of his reflections might line up with your plans. He seems to have retired at 35 as well and is now 45 and reflecting back on his 10 years of early retirement: https://www.financialsamurai.com/fake-retirement/

Last edited 23 days ago by ArtlukM
Chrissy @ Eat Sleep Breathe FI
07/19/2022 10:27 am

Hoorayβ€”you’ve finally taken the plunge! I’m so happy for you and am excited to see where life takes you now that you’ve gained all this time freedom.

As expected, it sounds like you’ve planned your post-work finances meticulously! Despite retiring into a messy financial world (as did we), I have no doubt you’ll be more than okay. Well done!

I’ve never heard of the buy and borrow method and am very intrigued. As you know, I’m a huge fan of leveraged investing. I’ll need to do more reading on this. πŸ˜‰

I think your YouTube numbers are pretty darned impressive. You’re good at it, so I’d say keep working at that. You’ll be at 4,000 annual views in no time!

Court @ Modern FImily
07/19/2022 10:29 am

Congrats! Enjoy the relaxing honeymoon phase doing nothing until the little one comes. Your new job title will soon become teacher (to your child – that’s what we’re going with in our house at least). Enjoy!

AnotherLoonie
07/19/2022 6:44 pm

Amazing. Huge congrats liquid! Looking forward to seeing what you accomplish with all of your free time going forward.

Financial Samurai
07/20/2022 8:46 am

Amazing! And congrats! You are leaving at the age I left in 2012 and I have no regrets. It’s been a blast!

You’re going to have so much fun and all the time you spend with your family it will be worth it. You can always make more money, but never more time.

R V
R V
07/20/2022 9:48 am

Wow, amazing! Congrats. You did it as you said you would!

I have been following you since 2014 and because of your posts in Aug ’20, I went ahead and borrowed against my Home Equity to buy individual stocks. I love your posts and your insights.

I wouldn’t have the guts to retire with $1M+ mortgage though. LOL. How are you able to do it? What happens when you renew the mortgage? Wouldn’t the bank want you to have a full-time job?

Moe (Moementum Finance)
07/20/2022 9:21 pm

Congratulations Liquid to you and your wife both for the retirement and for the new addition to your family 😊 I’m so happy for you. Enjoy your early retirement and family time. Also you’re almost there with YouTube Monetization. It’s only a matter of time buddy. Keep it up. πŸ˜€πŸ™πŸ˜Ž

Subbu
Subbu
07/21/2022 7:07 am

Congrats Liquid! Your reports on options made me sell cash secured puts and am entertaining the idea of buying a house to flip in order to use leverage. These two ideas clicked for me thank you for sharing your experiences and hope you continue.

ddivadius
ddivadius
07/21/2022 9:34 am

Congrats on the milestone!! I have been following you since you started. Hoping to pull the trigger myself in next year but I am much older. Question for you on your monthly income. Other than the rental income, how much of the other account withdrawals are dividends/distributions vs selling of the underlying investments? I am curious. Thanks and good luck with your chapter and new family addition.

Mr. Dreamer
07/21/2022 2:52 pm

This is TERRIFIC news! Congratulations. Can’t wait to keep reading about your journey and future plans and adventures.

And, hey, if you ever write that book, you got your first buyer lined up.

Thanks for sharing all the amazing news. You deserve it.

J C @ Passive Income Pursuit
07/21/2022 5:27 pm

Congrats on being well ahead of most people. One of the most interesting things is that you aren’t afraid to venture outside of “normal” i.e. your farm land from several years ago, or *gasp* using margin and I’m sure plenty of other things that I’ve forgotten or missed along the way. I’m looking forward to the day when we can join you as FIRE.

Robert
Robert
07/21/2022 11:28 pm

Congrats liquid, i’ve enjoyed reading your blog over the last couple of years. I don’t pretend to know how you live but your expenses seem very low (outside the mortgage). $200 of ‘fun money’ doesn’t seem like it would go very far.

My Own Advisor
07/22/2022 3:55 am

Awesome, Liquid. Congrats πŸ™‚ Loved this part in particular: But they’re all possible ideas I can revisit years or even decades later. I am in no rush to start anything new. After all. I already have an abundance of the most valuable asset. Time. πŸ˜‰ Yes, time, the ultimate commodity. Net worth by you with about $1.4 M is incredible for someone in their mid-30s. Interesting you are pulling the plug on the workforce, yet, you have $650k in debt. We’re doing almost the opposite for our FI journey since my wife is largely debt-averse. We’ll have $0 debt and a $375-$500k HELOC (or more) we can tap in semi-retirement in a few years as needed for any leveraged investing – but that’s our plan – lots of different roads (some shorter, some longer) to achieve FI. I won’t own any bonds myself but rather all equities and mostly dividend paying equities as we enter semi-retirement. I figure even with just “living off dividends” (and ETF distributions as well) we should be OK without any CPP, any OAS or even any TFSA withdrawals in the first 20-30 years of retirement. We want a good margin of safety with about a… Read more Β»

AlW
AlW
07/22/2022 4:07 am

Congratulations Liquid! I’ve got 5 years on you and just hit 2.3M net worth. I don’t think I’ll be able to pull the plug until I hit 5M….

Be a while yet.

Mr. Financial
07/22/2022 12:59 pm

Hey Liquid, hopefully with your early retirement you can make more YT videos πŸ™‚ I love your content on your blog, we need more of it on YT!
As someone just 1 year older than you and working part-time for the past 3 years, I know exactly what you mean about time. There’s no amount of money that can buy you time. It’s funny how we humans always put a price on it 🀣

trackback

[…] “Today is the first day of the rest of my life. […]

Snoopy
Snoopy
07/23/2022 7:33 am

Hey Liquid

I started reading your blog last year. I wish I had discovered it a year earlier lol.

Then I may actually would have been brave enough to borrow from my HELOC.

Thanks for your transparency in sharing your journey.

It truly has been thus far inspiring.

Arvin
Arvin
07/23/2022 9:02 am

Congrats!

Tim
Tim
07/23/2022 8:19 pm

Congrats!! I’m still saving up so I can CHOOSE to work or retire like you! How did you still get severence and Employment Insurance payouts if you quit and were not let go from your job?

Last edited 19 days ago by Tim
trackback

[…] Askola at Seeking AlphaDividend Income – June 2022 Update & FI Journey Update by Bob at TawcanI quit my day job! Here’s what I’m doing next by Liquid Independence at Freedom 35 BlogWhy does this stock always feel expensive? by European […]

AHR
AHR
07/25/2022 6:48 pm

Amazing, congratulations. Thank you very much for sharing your journey, your information has been a great tool to my journey.

AHR
AHR
07/25/2022 6:48 pm

And congratulations on the new addition to the family, enjoy every sec.

ckat
ckat
07/26/2022 12:29 pm

Congratulations on your retirement! I’ve been reading since almost the very beginning of your journey and you have been so inspirational.

You mentioned taking 3K out of your margin per month, but dripping the dividends so that means the dividends won’t be paying the margin back. How will this work in the long run? Will you just sell some stocks to cover the margin when the market recovers?

Congratulations on the baby. It’s exhausting but worth every moment.

trackback
07/28/2022 12:54 am

[…] ago, Liquid Independence wrote this post about quitting his job to effectively pursue the FIRE life. That piece made me think about this […]

AHR
AHR
07/28/2022 7:58 am

Liquid, I don’t mean to be pessimistic but what’s are your thoughts about experiencing a market like the Nikkei in Japan? The Nikkei is still not back to its peak set back in 1989. Do you think this could happen in North America?

trackback

[…] quit my day job! Here’s what I’m doing next (Freedom 35) – β€œI have been working at various 9 to 5 jobs for the last 14 years. But no more. June […]

freddy smidlap
07/29/2022 3:48 am

it’s good to see another self directed investor in stocks who puts out exactly what’s in the portfolio. well done and congrats on leaving the rat race.

DreamingOfDividends
07/30/2022 6:08 am

Woohoo! Congrats on achieving the retirement milestone. Best wishes for you and your family on adding a third.

Mohamed
Mohamed
08/08/2022 6:18 am

Hi there,

I have been following your blogs for few years and you been great motivation for me.

Just wanted to say Congrats and all the best.