Kristy Shen and Bryce Leung retired from their full-time jobs in their early 30s. They left traditional employment to pursue hobbies and passions of interest while traveling the world. The run the popular blog - Millennial Revolution. Their book - Quit Like a Millionaire is a popular read among the FIRE - Financial Independence Retire Early community and one that I was happy to finally read on my week off.
It was definitely an interesting read. Kristy shares her and her family's life story growing up in communist China and then immigrating to Canada as a young child. She shares common myths, misconceptions and a different perspective on common financial advice. I enjoyed reading about her life stories and struggles. She's overcome a lot and it's amazing what she was able to achieve with perseverance, planning and deliberate action.
In a nutshell, her and Bryce met in university and worked as software engineers. Upon starting their careers they decided that they wanted to leave the grind and traditional lifestyle of buying a house and settling down for one of adventure. They built an investment portfolio that sustained their living expenses and quit their traditional jobs in their early 30s.
There were a few key takeaways that I really loved:
Your past doesn't define your future. Whatever happened in the past, leave it and move on. Focus on solutions and how you can make your life better today, not what got you into the current state because you can't go back and change that.
Self directed investing in market index funds through ETFs (Exchange Traded Funds) that have lower fees rather than using a broker and mutual funds. Only 15% of fund managers beat the index and they get paid whether they make you money or don't. This is something my Dad told me many, many years ago, but I didn't have the nerve to start self-directed investing till my late 20s. Even now, I don't own any index funds because they are pretty much at all time highs!
They breakdown the exact split of their portfolio and the ETFs they own as well as their allocation and recommendations split through - bonds, Canadian equity, US equity and international equity. It's a very simple and easy way to structure a portfolio. In addition these ETFs do pay out dividends and they also have a cash buffer in the event the market crashes. They use a 4% withdrawal rate annually to sustain expenses.
They explain how they travel the world with details on travel hacking visas and exact cost breakdowns for the countries they visited over the period of a year. This was very fascinating, as we've done some travel but no where near as long as a year. It would be interesting to see if we would get tired traveling for that long and miss home.
Their strategy to not run out of money when the stock market is down:
Use dividend income from their portfolio instead of withdrawing down the balance
Use your "cash cushion"/ emergency savings
Move to a lower cost of living location
Start a side hustle
Go back to work to make up the shortfall
There were a few things I didn't like about the book
How it bounces between Canada and the US in terms of registered accounts, average salaries, education costs and more. It's confusing and annoying to scan and flip through pages that aren't relevant.
It's a lot of content. It starts out in a narrative but quickly moves into financial details, taking the book from an easy read to one that requires further concentration and note taking/research.
Bryce is listed as one of the authors, but the book is written in Kristy's narrative and we don't really know much about his life story or his thoughts.
At the time of them writing this book, they had been early retirees for 3 years. Given the turmoil of the financial markets and the lockdown of the whole world through Covid 19, I was curious to see what they are up to now. Good thing they have a blog! They are doing better than ever and so happy they made the decision to retire early.
I think the key to early retirement is to know what you want to do next and have a plan. Some of us are lucky to find careers that we love and never want to leave, but most of us work mostly for the money. Ideally, you never really have to retire if you can do something you enjoy and it offers enough flexibility for your hobbies and interests outside of work.