It is okay to call them FireCrackers because they have cracked the code to financial independence and early retirement. Kristy and Bryce are a Canadian power couple, who went against all odds to retire at an age most people only dream of. At 31 years old, they both ditched their engineering jobs and took to traveling the world instead. They told us all about their decision to F.I.R.E, the dividend investment loopholes and saving strategies, and how their journey has been so far.
Joining the fire movement, Kristy said, was a very personal decision.
“…I realized one of my coworkers at work, he was actually my mentor and we were quite close. He had been working crazy hours, 14-hour days, end to end for years and then one day I heard that he collapsed at his desk and then they had to take him away in an ambulance….we later found out that if it had been half an hour later, he would have died. This is the kind of toll that stress has on your life… at that point, I realized I don’t want this to happen to me. I don’t want to stretch and buy a really expensive mortgage and have a heart attack and die at my desk…”
“there are certain things worth sacrificing your life over, a mortgage is not one of them.”
As a couple, they quickly became aware of the negative impacts, their pre-FIRE spending habits would have on them in the long term. According to Kristy, they had to figure out a way to create passive income from their savings as opposed to dumping money into buying a house that only takes money out of their pocket through a mortgage.
“the second I made that decision, that move, that was the first time I could actually go to sleep at night and not have a panic attack. Like that was the point at which I was like okay, I know that there is a way, I know that there is a solution and I don’t have t, I don’t have to do this anymore in a couple of years.”
The couple admitted having a lot of fears before embarking on F.I.R.E like the fear of unforeseen circumstances. However, their background as engineers helped them a lot in analyzing their pre-F.I.R.E fears logically instead of letting being led by their emotions.
So what we did, Kristy said was the three-pronged approach:
- Having a yield shield from their investment portfolio which isn’t affected by the volatility of the market.
- They have an emergency cash cushion of around 3 to 5 years of expenses so as to live off from, in case of inflation or financial crisis.
- Geographic arbitrage which they talked about extensively in the interview. Living in a place that decreases the cost of living.
Health-care and Traveling
Bryce explained how their cost of traveling the world for a year after FIRING tallied with their annual living expenses of about $40,000.
“not only can we retire, but we can retire and travel the world, forever.”
Just to sight a practical example of the low cost of living while traveling as opposed to living permanently in a high-cost city like Toronto, Kristy mentioned that the cost of staying in a brand new condo apartment in Riga, Latvia – their location during the interview, was just around 30 bucks.
Speaking about health-care, Kristy explained that this phenomenon of paying for health insurance mostly only affects US residents as people who reside outside of the US do not have to bother about health-care or health-insurance. However, since they are both Canadians and spend most of their time living outside of Canada, they opted for Expat Insurance which covers those who are expats. The cost of that insurance she said, was around 60 CAD which is significantly low when compared to the regular health insurance required for non-expats. She sighted an example where the cost of medical care was waived by a doctor who attended to them in Thailand because it was just a rash and he refused to be paid for a service as minute like that.
Mortgage vs Saving Money
Kristy and Bryce have very compelling points against buying a house and owning the bank.
She stated clearly:
“we are not preaching against buying a house period, we are preaching against buying a house irresponsibly”
It doesn’t make any sense, she continued, to pay for a house when it will cost a lot less to rent a house in the same city. According to them, most people just take the banking calculator and put in the numbers without asking questions or finding out the additional cost that will drill a hole in their pocket as soon as they sign those papers.
“there is actually a lot of extra costs that come up that could inflate the cost by another 50%. Like you have to pay property taxes, you have to pay maintenance, you have to pay insurance to ensure your house. There is like closing cost as well when you sell, there is like lawyer’s cost…”
About their top saving strategies, they did not hold back with what sort of strategies they use in other to save money. It is no doubt that they have succeeded in cracking the code to living their best lives while saving a ton of money in the process.
Can Anyone F.I.R.E?
While you may look at your current income and although you really want to retire early, your annual income just doesn’t agree with you or the idea of saving and investing more than 50% of your annual income. But these FIREcrackers explained that the concept is the same even if you are earning much less than they did before F.I.R.E. Kristy further illustrated how one of their readers was able to change his situation around from following the tips and practical hacks on their blog posts with your $5000.
“You don’t have to be completely financially independent to reduce the amount of stress in your life and this is what we like to call the FU money because once you have enough money saved up that you don’t have to worry about it, you are no longer your boss’ bitch”
They emphasized that the goal is not always to retire early, it could be to just reduce the amount of stress in your life or can even opt for a partial F.I. Fire isn’t just about retiring early but becoming less stressed and taking up a job that allows more time for your hobbies and travel.
Cryptocurrency And F.I.R.E
Bryce is strongly against the idea of using cryptocurrencies as an investment strategy.
“…from the perspective of making money, I don’t think it is a great way to do it”
He backed his view on ‘no to cryptos’ stating that it is highly volatile and the percentage of losing money through hacks is alarming for anybody to think of it as a viable way of cash-flow. In his opinion, the idea of cryptos being secured due to the decentralization of blockchain is a double-edged sword. It is no surprise why this F.I.R.E couple feels this way about this emerging market as they also told a story of a close friend of theirs losing all his money to crypto theft.
“so I never advocate for people to touch this stuff unless they really really know what they are doing and most of them don’t know, unfortunately.”
How To Invest And Retire Early
All throughout the interview, Kristy and Bryce spoke in-depth on the various ways a person aiming at firing can afford to F.I.R.E successfully. They recommended starting with their Investment Workshop which they created to help upcoming FIRE recruits on their journey to FIRE. The workshop is a free resource and step-by-step guide on how to open up a brokerage account, how to design a portfolio, which index ETFs to buy, how to rebalance your portfolio and everything that comes in handy when investing. The concept can be applied to in any country and the steps are very generic.
They also recommended J.L Collins’ The Simple Path To Wealth and their soon to be published book ‘Quit Like A Millionaire’ (subscribe to get updated on the release date). Kristy and Bryce took the time to share their amazing FIRE stories and what helped them along the journey to F.I.R.E.
Check out their blog, millennial revolution for more about their FIRE journey and please subscribe for more.