Well that was a long hiatus from blogging!! We’ll see how long I last this time around: there is no question that my urge to write comes and goes in waves and is rarely constant. I’ll admit this, however, it’s a lot of fun to let loose on a post when the ideas are flowing and the story is basically writing itself. Today I want to share how my pursuit of a football coaching career has really provided me with an informal (and very involuntary) education on how to be a naturally frugal person.
While frugality might not be a sexy topic that is naturally of interest to most people, I’m sure there are many out there who are interested in “retiring early” or obtaining early financial independence, which is usually a by-product of being frugal (or perhaps a better way of putting it, “financially efficient”) and intelligent with the money that one has. Personally, I don’t intend to work in a full-time job setting until the age of 60 or 65 like many people do, although I’ll certainly continue to “work” on various projects throughout the remainder of my life. My intention is to leave the world of regular work at some point in my forties (I have a more precise target age, but won’t reveal it here on my blog!). Part of how I plan on making this idea a reality is largely based on the lifestyle I will have over the next couple of decades (and beyond), which is based on how I’ve already been living my life for the last ten years or so.
First off, time for a little back story! Back when I first started going off to university, with an approximate budget of about $20 000 for the eight months that I’d be away from home (which was then Vancouver), I began to develop a set of spending habits (budgeting, living with roommates, low levels of impulsive buying, etc.) that allowed me to make my $20 000 last throughout the school year. Knowing what I know now, I could have probably lived off of less at that time of my life, but that is what experience is for – learning!! For several years, I was very successful at taking the money I’d received from my parents to help cover my cost of education, and combining it with my own income from various part-time and summer jobs. I broke even on an annual basis. About one-third of that 20 grand went toward my tuition, and the rest went to all my other living expenses. About half-way through my degree, I came to an intriguing and very simple realization; if I was not studying in school for two-thirds of the year, I could take that one-third sum of money geared toward my courses and cover the remaining one-third of a year’s living expenses. In essence, I could theoretically live on $20 000 a year!
I started to really champion the idea of living off of $20 K/year (some people live off of significantly less!) to a few members of my family. Most thought that the logic was pretty good, except for the fact that I would need to spend more with age as I took on additional financial commitments. Those people were correct in predicting that I would be subjected to some lifestyle inflation upon graduation, but in reality the effect has been very small in my case. After graduating from university, I started working part-time at the local private school where I now hold a full-time position, all while coaching CEGEP football. Money at this point in my life was pretty scant – there were several times over the first four years out of school that I needed miniature financial bailouts from my parents to cover things like a month’s rent. My story was the same as it is for a lot of millennials these days, some of whom are often forced to live at their parents’ house until they are financially ready to go it alone. That wasn’t going to be my reality – I live in Québec while my parents live in British Columbia! Moving back in with my folks would have constituted a complete rebuild of my life. I simply had to make my money stretch a bit further!
During my first four years out of school, I continued to live on my roughly $20 000 a year budget. This was not because I was trying to be voluntarily frugal, this was because I never made more than $20 000 a year in gross income at any point during that period of my life!
News flash: coaching football in Canada doesn’t pay (much)!! At least not for over 95% of the guys who do it with the same serious passion that I have for the endeavour. One of my personal goals is to one day be in that 5% (or less).
One of the great highlights of that stretch of my life was the five months I spent coaching in Trois-Rivières, QC, which bizarrely I have not written about yet. Without question, my time in the small central Québec town was a transformative moment in my life. I made just a little over $6000 during the course of those five months. $6000 in five months! It’s pretty hard for most people to see themselves living in that situation, but I voluntarily chose to accept those terms and have absolutely no regrets for having done so. In a sense, I was being paid to learn French and do my favourite thing in the world, all at the same time. Let’s be clear on something – I had some help from my friends! I maintained my apartment (with two roommates) in Montréal, where I returned to every weekend for a sacred 36 hour recharge once a week. Meanwhile in Trois-Rivières, a colleague and I shared an apartment that cost us $390 per month, total! For around $650 a month, I had a place to stay in both cities. Our “palais” in Trois-Rivières is one I’ll just never forget. Right next to the local rail yard, the entire building would shake at night when trains passed through the town. It was like having a free massage every night as we went to bed between midnight and 1 AM! « La simplicité involontaire » as we would say in French…
Fast-forward to 2016. I live alone (which carries a premium cost to it) in a cozy little studio (this keeps the premium cost down, however). Currently I lease a car (this is something that is new to me, until the age of almost 27 I did not have access to a vehicle). The only reason I have it is because of where I’m currently coaching. John Abbott College is around 30 kilometers from my apartment, so a car is an essential tool in my life’s toolbox. These two items are easily the most expensive items in my budget. They are the only two hints of lifestyle inflation that I have incurred since taking on my full-time job; otherwise, my life goes on as it always has. Frugal and very calculated, I have been a savvy spender for close to ten years now. Over the course of those ten years, I’ve managed to become much more financially efficient because I have detached myself from the idea that owning stuff makes you happier. In my own experience, it simply doesn’t. Spending time with great people and doing things that you love does though, and from this notion comes my plan of gaining my financial independence at an earlier age.
The math behind retiring early is simple and easy to understand and I will let the work of other bloggers educate those who are now very curious. Basically, if you jack your personal savings rate way up into the 50%-75% range (which is relatively easy to do if you live a low-cost life), and wisely invest your saved money to create passive income over the years you spend working, you can drastically reduce the amount of time needed to build a portfolio of assets that will endow your often-much-lower-than-average cost of living. It isn’t magic; it is the simple concept of compound interest backed up by decades of empirical data. This process has been done successfully by regular, everyday people, and is being carried out increasingly by others who value their time and realize that it is the most valuable commodity that we have, but can never keep. For me, it is not that I want to be lazy and do nothing with my life (that would be excruciatingly boring…) – what I want is the ability to always be able to work and live on my own terms.
For anyone interested in learning more, there are now many different blogs/podcasts/YouTube videos that can explain more on how achieving personal financial freedom is possible for most people. A simple life that is based on valuing the little things (which are often free) and letting go of the relatively worthless big things (which usually cost a ton!) is one of the key ingredients to taking full control of what you can do with your time, and therefore your life.