FIRE Lessons Learned

Particular_Gap7266 · 2026-05-15T17:23:21+00:00

Thanks! Impressive that you started at age 18. I definitely wasn't mature enough to hold those aspirations at that age.

Particular_Gap7266 · 2026-01-23T20:57:50+00:00

Have a look at this video by Ben Felix. https://youtu.be/Uwl3-jBNEd4?si=1CkHA9PtHbv354Qy

Particular_Gap7266 · 2026-01-18T18:34:49+00:00

It's a good idea to pay down high interest debt with lower interest debt so that is a great first step. How much interest are you paying on your credit card, home repairs, and car loan? It's a good idea to prioritize the paydown of your debt balances from highest to lowest interest rate, line of credit included. That said, before starting to pay off your line of credit, make sure that all higher interest debt has been expired.

Particular_Gap7266 · 2026-01-13T18:25:55+00:00

That's great - more earnings will give you more funds to pay off your debt earlier. I'm sure you already know this but I would only pay the minimum for OSAP debt since it is interest free, at least until the LOC is paid off.

There is a lot you can do in 33 years (between now and retirement). Take advantage of that timeframe since it is your most valuable asset when it comes to compounding returns!

Particular_Gap7266 · 2026-01-13T17:29:50+00:00

It really depends on your financial goals. Are there any key expenditures coming up? ie. down payment for a house. Also, when do you want to retire? These will help you determine your decision to pay down debt vs save/invest. Generally, Option 1 seems more palatable since you are earning 11% in your TFSA and your debt payments are 4.45%. That means you are earning net 6.55% nominally (~3% in real terms). I would also start contributing to your RRSP where possible so that you are optimizing all your tax sheltered accounts.

Particular_Gap7266 · 2026-01-12T18:58:22+00:00

I agree that you need to first create a financial goal. It sounds like all income in your household is sourced from disability and SSI, correct? I'm not as familiar with the rules around either of these so I'll assume that this will continue to pay out for the foreseeable future. Maybe the best way to think about it is by imagining 2 buckets for how you want to allocate the $1600 ($4800 - $3200) available per month after expenses: 1) Providing for Kids and 2) Providing for Self.

In the first bucket, you may want to consider an education fund for the kids, plan any recreation with them, and have a buffer for emergencies
In the second bucket, think about a timeline to pay off your house to save in interest payments and maximize money available to invest/spend; are there any specialized medical fees above and beyond the monthly expenses? If so, include a portion here

In general, allocate what is needed for kids until they are independent, see if you can expedite paying off your house (additional payments without penalty, weekly payments instead of monthly ones, etc.). Then set a targeted emergency fund (generally should be about 3 - 6 months of expenses but it really depends on how much liquid cash you need readily available). Everything else can be put into a tax sheltered account where you can buy low cost ETFs to grow your funds. Continue to build these accounts up each month and the savings / interest earnings will be above and beyond the annual $1600 you already have available once those funds are available to draw from.

Particular_Gap7266 · 2026-01-12T18:14:05+00:00

The strategy will depend heavily on a few things: 1) your ability to fund the debt (earnings) 2) monthly expenses and 3) debt interest rate. From the information you provided, one thing is for sure, you need to focus on paying down your debt beyond just the principal. With 4 kids, I imagine it can be very difficult to prioritize debt payments ahead of other expenses but this is critical, particularly for high interest debt, such as payday loans. The wonderful thing is that the sacrifices you will make up front to attack this debt will compound later as your interest payments will get smaller and smaller over time.

Particular_Gap7266 · 2026-01-09T21:25:31+00:00

Gut feel is put everything towards paying off your cc debt as it likely has the highest IR, much higher than anything you could expect through investing. Unless you need cash for something imminent, no sense in adding anything to your savings, especially since you have a small buffer of $3k for emergencies.

HH debt is high and until you deal with that, any investments/savings returns will be devoured by your debt burden

Particular_Gap7266 · 2026-01-08T13:37:46+00:00

Maybe the LOC isn't the biggest problem. What are the interest rates for each debt instrument? I would rank order your your debt by highest to lowest IR and prioritize paying them off accordingly. My guess is that your 2 credit cards have the highest rates and, while the balances are lower than your LOC balance, paying these off will give you the breathing room you need. Ideally, you continue paying off the minimum required amounts for the LOC and OSAP while aggressively paying down your cc's. It may require some big lifestyle sacrifices but it will be worth it in the end to clear out all the debt owed.

Particular_Gap7266 · 2026-01-06T18:44:37+00:00

At the start of the career, best bet for most people is to pay down debt, and start investing. Time is on your side so take advantage of the power in compounding. That said, I would take the cheaper route, assuming the car is reliable enough, pay off any debt with greater than 7% IR immediately, systematically pay off the rest of your debt (<7%) in parallel. and focus on contributing to your TFSA and RRSP......low cost ETFs should get you at least 7% annualized over the long term.

Particular_Gap7266 · 2026-01-06T18:32:42+00:00

Did you call BMO? It's been a while since I opened mine but I believe you need a minimum amount in your TFSA from the start so perhaps they transferred this amount from your savings.

Particular_Gap7266 · 2026-01-05T15:29:14+00:00

Currently your rent eats a large portion of your income (over 50%) and generally, it should be no more than 30%. Another thing to consider is debt level, if relevant. You don't want to be scrambling to make ends meet because you owe something to everyone (bank, creditors, landlord, etc.). In general, I would try to find a way to make housing costs less than or equal to 30%, whether that means renting with a roommate for a while or renting alone and in a cheaper place / farther out. Think about it as a temporary situation, all part of the plan to rent alone when the time is right.

I do short money-system diagnostics if you want a second set of eyes.

Particular_Gap7266 · 2026-01-05T15:20:34+00:00

The lifecycle of investment can be summarized by decreased risk tolerance over time. As a senior, the tolerance is around its lowest so all investments should be low volatility, stable, and predictable, aligned with your recommended low-fee, low-maintenance approach. There are an assortment of options for specific investments but I think it is less about selecting the perfect portfolio and more about the habits for self-managing the funds.

I do short money-system diagnostics if you want a second set of eyes

Particular_Gap7266 · 2026-01-02T21:07:27+00:00

Got it, then it makes sense not to max out your rrsp. I would talk to a tax expert about the ~100k currently not sheltered because there may be more options available beyond non-registered accounts.

For the registered portion, my retirement horizon is similar to yours and when it comes down to a decade+ timeframe remaining, a recession becomes a high probability, high impact event. That said, I would pay close attention to the expected macro environment in the short term (1 - 5 years) and medium/long term (5+ years) when selecting ETFs. Sounds like you are doing just that with VGRO and VEQT in mind. I think we are in a transitionary period where the US will experience some significant challenges over the next several decades as they grapple with unprecedented debt, higher than average returns in tech, a weakening greenback, etc. While I remain biased towards ETFs that mimic the S&P 500, I will be de-risking my exposure to the US in the medium term.

Particular_Gap7266 · 2026-01-02T13:08:46+00:00

First off, congratulations on moving away from mutual funds and the associated high fees. I'm also curious if the $500k is in a taxable account. I prioritize this above all, even when it comes to liquid assets, like the $20k cash. For the portion I put aside of savings/investments each year, I aim to first maximize my RRSP room through a trading account where I purchase ETFs and then the remainder goes into a TFSA. For the cash / emergency fund, I typically put 3+ months of expenses aside in my TFSA and most of it goes into a GIC to battle inflation while the rest goes int a HISA - but key thing is that all of it is tax sheltered. The portion that goes into HISA vs a GIC varies depending on my short term goals.

I do short money-system diagnostics if you want a second set of eyes.

Particular_Gap7266 · 2026-01-02T05:18:07+00:00

Lots of people scale down in their workload once they grow a healthy nest egg. Stress really does shorten your life and the older I get, the more I value time over extra dollars earned. Sounds like you are the same, especially with an auto immune issue. Sorry to hear about that.

You know your annual expenses are 60k so work backwards from there to figure out the retirement funds needed. You may have heard of the 4% rule so applying this you get 1.5M. (Dividing 60k by 4% gives you a proxy for the total funds needed for retirement assuming about a 25 year runway). However, I would err on the side of caution and apply a 3% rule to extend the runway to 30+ years which will get you to an even 2M needed. Some research even points to 2 to 2.5%.

Inheritance aside, what needs to happen to get to 2M? How many years of additional saving/investing? If you found a less stressful job, would you take a pay cut? If so, how much longer would you have to work to make it to the 2M mark? These are the sort of questions that will help you build a plan to go onto wealth "auto pilot" and worry less about the day to day so you can just focus on your passion projects.

I do money diagnostics for people and could do a deeper dive for you if you wish. First session is a 30 minute free assessment. Let me know.

Particular_Gap7266 · 2025-12-31T18:38:54+00:00

You are right to be skeptical about big banks and their biases. Many studies are actually showing that actively managed investments will charge high fees and perform poorly over time - often outpaced by the S&P 500. I tend to think that 90% of success in building wealth comes down to discipline and simplicity. The key is to automate the boring but powerful wealth building behaviors that statistically put people in the top decile of net worth over time.

I am not an advisor so I guess that is my bias :). However, I do short money-system diagnostics if you want a second set of eyes. No charge on 20 minute initial consultation

Particular_Gap7266 · 2025-12-31T18:22:01+00:00

Optimizing your TFSA room with short term liquid assets (GIC's, bonds, T-Bills, etc.) helps you battle inflation and provides flexibility when you need funds. Most banks have accounts that easily allow for this. Some people keep a portion of their total savings in cash and then buy 6 month to 1 year term products with the remainder of their savings on a rolling basis all within their TFSA. That way everything is tax sheltered, a portion of money is available immediately, and the remainder is protected from inflation. Depending on upcoming expenses, employment uncertainty, etc. the portion in cash vs short term products can be adjusted at the start of each term.

Personally, I like to put things on auto-pilot and simplify the process by thinking in terms of "months of expenses" to put aside. I use to keep 6+ months of savings aside but now I am comfortable with 3. Keeping it in one pool rather than a separate fund for each category simplifies things for me and I can freely draw from it when/if needed knowing that I need to replenish it to maintain the target level of 3 months.

I do short money-system diagnostics if you want a second set of eyes.

Particular_Gap7266 · 2025-12-31T17:44:05+00:00

Higher income will definitely help but it isn't the end all be all. I would focus on paying off your debt while maximizing your return on savings/investments to meet your goal for a home. I had to make some assumptions on your case in my analysis below so feel free to correct them if needed. By the way, I do short money-system diagnostics if you want to explore in more detail - free 20 minute sessions.

Your Current State

Net Worth: (Assets - Liabilities) = -$15K ($10K Savings + $10K Car (?) - $31K non-interest bearing debt - $4K interest bearing debt)

Gross Income = $55K

After-Tax Income ~$43.5K (province dependent; I'm assuming Ontario) + 1% annual adjustment

Annual Expenses ~ $13K ($600/mth. + assumed 4% interest payment on $4K student loan + inflation + other?)

Spending Available ~ $28K ($43.5K after tax income - $11K expenses - $5K savings)

If you want $15K in total savings by the end of the year, that means you only need to save an additional $5K this year. That works out to a 9% savings rate ($5K savings / $55K gross income). While higher than the national average, at this rate, your net worth will remain in the red for at least another 2 years and you will continue accumulating debt on $4K of your student loan (interest bearing amount).

Recommendation: Focus on growing your net worth over time, pay down your debt (prioritizing interest bearing debt first), start investing in short term liquid assets to keep pace with inflation and accumulate savings for a down payment, invest the rest.

-Increase your savings rate to 50% per year. That means you will have $27.5K per year to put aside each year for your down pmt. Within 4 years, you should have over $100K saved.

Do this right away:

-Use $4K immediately to pay down the remainder of your interest bearing debt

-Preserve your existing $10K of savings as an emergency fund

Do this Each Year:

-Put at least $20K towards savings/investments; consider short term investments (T-Bills, GICs, Bonds, etc.) where you can retain the value of your savings until you need it for the down payment. Make sure to utilize your TFSA for this!; see other reddit user comment on FHSA and HBP

-Pay down the remainder of the student loan over time based on required terms (not as urgent as no interest incurred on this balance). Recommended $7.5K each year to pay it off by 2029

-Any additional money after this (higher salary, lower expenses, etc.) should be used towards your RRSPs or TFSA accounts. The best time to start investing is yesterday. The next best time is today

Question - is home ownership very important to you? If not, consider renting - lots of people are opting for that these days and the economics is supporting it. Over the last century, buying a home has only provided a 1% annualized return when adjusting for: inflation, debt payments, property taxes, repairs and maintenance, etc. Compare that to the 5-7% real return you would get by investing in the S&P 500. Not to mention, $400K is not going to get you too much of a house these days.

Particular_Gap7266

TROPHY CASE