I first got to know Courtney and her family through her Instagram, Fire2Moms1Babe, as the breadwinner of her financially independent family of three. Her wife Nicole stays home with their young daughter, and they plan to pull their full early retirement trigger in the next few years when Courtney quits her job.
I reached out to her a few months ago because I loved following along with their story on Instagram and wanted to feature it here. Since then, she has actually launched her own blog at Modern Fimily. I feel pretty lucky to be able to host her first guest post here and get to welcome her as a brand new blogger in the financial independence space.
Like I’ve said any number of times, there is always room for a new voice in this blogging community, and I am so excited she’s taken the leap to join us here. I know she had been considering writing one for some time, and I love that this is really her very first blog post (written, as she’s published a few on her site already).
I’m going to turn this post over to her now, and let her tell you all about her journey to financial independence and her plans to leave the workforce in the near future. I’m honored to share your story, Courtney, and welcome to the blogging community. We’re so glad you’re here.
First off, we wanted to thank you for having us as a guest on your blog. We launched our own blog just a few weeks ago so we are new to the blog space! We wanted to share our story to help motivate others on their journey to financial fndependence, especially those with children to show it’s doable. Our ‘why to FI’ is to spend as much time together as a family as possible, as time is the most precious gift we have.
I’m 33, my wife is 31, and we have a 1-year-old daughter. We reached FI as a family of 3 in 2018, but we’re looking to hopefully add baby #2 in the near future so we’re saving with that in mind and calculating this additional child expense in our FI/RE calculations.
If all goes as planned (pending any market crashes), we will be there in less than 2 years for our future family of 4. We are a lesbian couple and we love breaking the stereotype that the ‘man of the house’ deals with the money and that women are not in tune with their finances. Clearly, that’s not even an option for us!
As a lesbian couple, we’ve had to set aside money to start our family. Luckily for us, my wife got pregnant on our first IUI attempt so it wasn’t a major financial strain for us, but we know of many couples who have spent tens of thousands of dollars trying to start a family (not just LGBTQ+ couples, many hetero couples need infertility treatment also).
Besides that, I wouldn’t say being a lesbian couple has impacted our financial life in any way, other than the fact that I work in a primarily male dominated industry (energy) and see the struggle women and minorities face trying to climb the corporate ladder.
Our family and friends have been extremely accepting of us, but we know that coming out can be a huge burden for some LGBTQ people if their families and friends are unaccepting, which is truly saddening.
Discovering financial independence
I was first introduced to the concept of FIRE through the Mr. Money Mustache blog back in 2011 and was immediately hooked. I had always been frugal, a saver, and a lover of my life outside work, but his blog really propelled me to the idea that retiring in your thirties is actually doable. Since then, I’ve been reading & listening to many other financial independence blogs & podcasts out there for additional motivation and strategies.
I majored in Economics and Math in school so numbers ‘click’ with me, but I didn’t have a clue as to where to start investing prior to reading these blogs so I am forever grateful for discovering this community.
I will be very open and share our finances so you can see how we have reached financial independence in a 10-year time period. To start, I’d like to stress that we’ve reached our number from my sole income alone. So while I am a high earner, reaching financial independence in 10 years as a couple who both earn close to the median US salary (~$56k) is doable too. It’s all about your mindset and living intentionally.
Debt payoff phase
Back in 2009 (dun dun dun), I finished my Master’s degree and luckily landed a job right away considering the economy at the time. I also had $70,000 in student loan debt to my name. My starting salary in 2009 was $69,000 with a 10% annual bonus (way higher than I was expecting to start off making due to the financial meltdown at the time) and it’s slowly climbed over the years and is currently $111,000 with a 20% annual bonus. I’m currently toying with the idea of switching to a part time role where my income would drop 50% as we transition to FI/RE.
My original goal out of school was to pay off my student loan debt ASAP and I managed to pay it off in 2.5 years through maintaining my frugal college lifestyle (I had not yet heard of FIRE at this point, so this gives you a glimpse into how I am a debt-adverse person as is).
I lived in a 2 bedroom, 2 bath apartment right across the street from where I worked with a roommate to cut down expenses. I drove a used Vespa scooter. I would go out with friends during happy hour to keep alcohol expenses low and host pot lucks at my place to socialize frugally.
House and travel hacking
The next plan was to purchase a home so I saved up for a 20% down payment, bought a townhouse in 2012, and house hacked and paid off the mortgage again in a 2.5-year timeframe, and then sold it in 2017 for a $100,000 profit.
By house hacking, I mean that I was living for free as I bought a 4-bedroom townhouse during the crazy Florida foreclosure mayhem and rented out 3 of the rooms and the rental income more than covered all housing related expenses (mortgage, HOA, utilities) which allowed me to pay off the mortgage at an extremely fast pace.
During this entire time, I travel hacked as well and visited 25+ countries by just paying taxes on the flights thanks to the generous credit card sign up bonuses some banks offer. Travel hacking is NOT for everyone, if you cannot pay your monthly statement in FULL each month then it is not worth the hefty interest charges. But if you are disciplined with your spending and payoffs, travel hacking can be an amazing way to see the world for dirt cheap. We currently have over 1 million travel points banked up for future trips.
Moving from Florida to Canada
In 2015, we moved from Florida to Western Canada (where my wife is originally from). So many people look at me like I have two heads when I say I, a native Floridian, was willing to move to Canada. But honestly it has been such a wonderful experience and I do not regret it one bit. The people are MUCH friendlier, life isn’t as chaotic, it’s a very outdoorsy and nature centered focus where we live, and we are less than an hour from Banff National Park and the Canadian Rockies.
We used the proceeds from our Florida townhouse (profit from sale + rental income with roommates for 3 years + renting the entire place out for 2 years after we moved) to purchase our brand new townhouse that overlooks a conservation area and we couldn’t be happier with our location. Our townhouse is not big but it’s perfect for us as it’s not about how big of a home you have, it’s about how much happiness is inside.
Financial independence with a family
My wife, who is 100% on-board with this lifestyle too, had $40,000 in student loan debt when she graduated from school in 2012 that she too made a mission to pay off quickly. In fact, we met while she was in nursing school and she was sleeping on the floor.
Not a mattress on the floor, directly on the floor! She only bought a mattress when I was coming to visit for the first time, a little extreme but she was living on a very tight student budget. She paid off her student loans in two years and currently has about $25,000 in savings. Throughout that time, she was also contributing to our mortgage. She is now a stay at home mom for our little monster.
We currently spend about $24,000/year on our family expenses (no mortgage to deal with) and our financial independence number for a family of 3 is $700,000 (giving us a buffer up to $28,000 in annual spending) using the 4% Safe Withdrawal Rate (SWR). However, we prefer to err on the side of caution and use a 3.0-3.5% SWR especially after reading the wonderful (long and full of numbers) series on SWRs by Big ERN. We are using geo-arbitrage and the Canadian Child Tax benefit to reduce our SWR to below 3%.
Intentional, frugal living
Clearly we keep our expenses low but over the years we’ve learned a simple, minimalistic, and intentional life is a good life and we are perfectly content living the way we do. We don’t have cable, we hardly ever buy new clothes, we have no problem with hand-me-down baby items, yet we do not feel deprived in any sense.
We travel multiple times a year, spend as much time as possible at my wife’s family cabin in the summer, read books, enjoy a morning cup of homemade coffee or tea, and we cherish time spent in nature – especially hiking and skiing in the beautiful Canadian Rockies.
We also realize how fortunate we are to be in our financial situation where my wife is able to stay at home and thus we do not have child care costs which can really add up. We are intentional with our spending and value experiences over things.
Current numbers and investment strategy
Currently we have a net worth of $1,125,000 if you include our home equity and paid off cars. However, the number we use for our FIRE calculations is $800,000 which does not include our home & cars as these are not liquid assets. Our FIRE number is $875,000, which equates to $35,000 annual expenses assuming an additional child along the way. Our target is to reach that in 2021, thanks to the power of compounding interest and our savings rate of 75%.
Our investment strategy is to keep it simple in low fee index funds which track the overall market. We max out our tax advantaged RRSP/TFSA accounts (US equivalent is 401k/Roth IRA) as well as our RESP account for our child (US equivalent is 529) and then everything else funnels into a taxable brokerage account (VTSAX in the US via Vanguard or VUN.TO in Canada via Questrade). When we were living in the States we also took advantage of our HSA account too. We hold a 90/10 stocks/bond ratio.
Heath care – Canada
Since we live in Canada now and have no plans of leaving (oh the poutine!), we fortunately do not have the same worry of health care costs as our US counterparts but we still plan to have supplemental health coverage in our FIRE calculations. Canada also offers a pretty nice Canada Child Benefit (CCB) which we don’t get to utilize now as I’m a high earner but we’re expecting to receive ~$5,000/child/year until each child is 17 once we reach FIRE and our income drops. We are not including this benefit in our FIRE numbers in case there may be changes to the system in the future, so we are viewing it as icing on the cake and essentially drops our SWR from 4% to 3%.
We also are contributing $2,500/year into our child’s RESP education plan to receive the governments full 20% match ($500/year) and our FIRE calculations account to max out these benefits for each child through the age of 17. This $42,500/child out of our pocket equates to ~$95,000/child once they turn 18 assuming a 7% annual return to cover their education (which should be more than enough in Canada).
We also will be lowering our SWR due to geo-arbitrage. A majority of our investments are in USD and we will use the USD/CAD exchange rate to our favor and this drops our SWR even further below 3%.
My wife is currently working on a side hustle. While we’re not looking to make it a full time gig, a part time hustle can still bring in $5-10k/year. Just because we “retire”, it does not necessarily mean we will never do anything that brings in an income. It means we can choose to spend time on whatever we want, when we want. If it brings in money great. If not, who freaking cares. Throw say $7k/year of “hobby money” in and we’re sitting below a 2% SWR.
The sayings “a simple life is a happy life” and “it’s the little things that really matter” are so incredibly true. We value relationships and a sense of community. We spend at least an hour outside every day and nature is our therapist. We enjoy making home cooked meals. We value exploring the world around us and learning about new cultures. We stop to smell the roses (literally, our kid insists we stop at EVERY tree to “pet” the trunks and every dandelion to tickle and pluck each one of them). We understand how spreading a little kindness goes a long way.
We are so happy to see that the FIRE is spreading! It’s truly all about a shift in mindset and hope to show the world that over-consumption, over-spending, and trying to keep up with the Joneses isn’t a sustainable way of living for both your wallet and Mother Earth. Pay your future self first by increasing your earnings, slashing your expenses, and investing the rest.
Cheers and thank you Angela for having us on here!
Courtney, Nicole, and Finn