More Money Podcast - 141 Deconstructing FIRE (Financial Independence Retire Early) - Bob Lai, Blogger at Tawcan

Episode Date: January 31, 2018

Have you heard of the FIRE movement before? In this episode I chat with Bob Lai from Tawcan about what it means to be financially independent and how make an investment strategy to get there. Long description: For anyone who wanted a deep look into the FIRE movement, and to get the low down on how to become financially independent, this is an episode you are gonna love! I chat with Bob Lai, the blogger behind Tawcan, about his plans to reach financial independence while being a single-income family with his wife and two kids. He even shares what his personal investment strategy looks like: a mixture of dividend paying stocks (a.k.a. blue-chip stocks), index ETFs, and a small percentage of growth stocks. Now, if you’re just getting started with your investment journey, before getting into DIY investing like Bob, a good place to start is by investing in index mutual funds, like the portfolios that Tangerine offers. It’s actually what I started investing with, as they track the index and charge way lower MERs than the big banks. Financial Independence vs. Financial Freedom Most people use these two terms interchangeably, I’ve even been guilty of it. But talking to Bob, I learned that they actually mean to very different things. Financial independence is when your passive income exceeds your expenses. Many people believe the magic number is to have 25 times your living expenses saved up through savings and investments. Or if you’re more conservative, 33 times your living expenses. Financial freedom on the other hand is a relatively loose term, but generally speaking mean that you’ve accumulated so much wealth that you don’t even have to worry about or rely on your passive income. Happiness vs. Joy Another concept we talked about was the difference between happiness and joy, and balancing the two. You see, happiness is externally driven and has an expiry date. For instance, when you get a raise or buy something you’ve been saving up for. Both of those things would make you happy, for a time, and then it would dissipate. Joy is internally driven, and is the feeling of being at peace. It’s also less fleeting than happiness, and usually comes about from fulfilling experiences and being around your loved ones. A big part of the FIRE movement is about focusing on joy instead of happiness. Also, joy doesn’t cost as much as happiness (if we’re talking about happiness through buying goods), so the more you focus on joy, the more money you’ll be able to save to reach your goal of financial independence. Stocks that Pay Dividends vs. Stocks that Don’t Not all stocks are the same. Some pay dividends, some don’t. The companies that don’t pay dividends (ie. Facebook) are the ones that are still in a growth stage. Instead of paying dividends to their shareholders, they reinvest their profits to continue to grow the company. Companies that do pay dividends are companies that are already so big (Proctor & Gamble, Johnson & Johnson), that they don’t need to reinvest all of the profits for further growth, so they share their profits with their shareholders (also making those shares more lucrative to potential stock buyers). Bob’s Top Blog Posts You’ll Want to Read FIRE. RIP. 2014-2018 Building My Dividend City How My Struggles with English Taught Me About Financial Literacy Learn More About Bob Lai (Tawcan) Follow Bob on Twitter Like Bob on Facebook Follow Bob on Instagram Follow Bob on Pinterest For full episode show notes, visit https://jessicamoorhouse.com/141 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 141 of the Mo Money Podcast. I am your host, Jessica Morehouse. Thank you so much for joining me for another fabulous episode. This one really is fabulous because it is a little bit spicy, a little bit fiery because we're talking about FIRE. FIRE, in case you don't know what that acronym stands for. And I think we talked about it a little bit in Tanya's episode from Our Next Life. That's episode 133, if you're interested. FIRE is an acronym for Financial Independence Retire Early. It is a whole movement that I kind of discovered, I don't know, in the past couple months or past six months or whatever.

And I really got to know it when I went to FinCon this past fall. And I am totally sold. I think it's so cool that there's kind of this movement that is promoting people to not just save and invest for retirement, but try to go a step further and reach financial independence and retire early. And so I kind of go in-depth, deconstruct what FIRE is all about with my next guest, Bob Lai from TalkHan.com. And he is on the road to reach financial independence. I think he actually mentioned in the episode that technically he could be considered financially independent at this moment. But he wants to continue to work and earn money, save money and invest for his kind of dream of living anywhere

with his family and just living it up, living that best life. So we really get in deep about, you know, a couple really interesting things. He has so much knowledge in that brain of his. I'm so glad I kind of just like bombarded them with questions like what's the difference between financial independence and financial freedom? We're talking kind of happiness and joy and balance and why that's so important to the FIRE movement. And then we even kind of go real deep into like, okay, let's talk, you know, strategy. How can I grow my money to an amount that would allow me to become completely financially independent? So we go into all of this really great stuff in this episode. So if you wanted an episode that was about investing, you are in luck. But before I get to that interview,

here's just a few words about this episode's sponsor. Support for this episode comes from Tangerine Investments. Did you know that according to a recent study by Tangerine, over a quarter of Canadians, 28% to be specific, are committing to better money management practices for 2018? Did you also know that 63% of Canadians feel that investing is scary? If you're nodding your head right now because you're in one, if not both of those groups, then let's turn those New Year's resolutions into actionable goals this year. And let's start by getting you over that fear of investing so you can start working toward reaching your financial goals. Not sure where to start? Why not start by checking out Tangerine?

Tangerine offers investment funds that are low cost and they follow a simple approach that doesn't require you to be an expert. Tangerine offers five diversified portfolios that are low cost and they follow a simple approach that doesn't require you to be an expert. Tangerine offers five diversified portfolios that are recommended based on your needs, risk tolerance, and investment goals. The best part? You can get started online in minutes and their investment experts are just a phone call away if needed. You can learn more at tangerine.ca slash investments. Once again, that's tangerine.ca slash investments. Thank you, Bob, for joining me on the Mo Money Podcast. Hello. Hello. I'm so excited to chat with you because, well, you're a fellow Vancouverite and I always

love talking to Vancouver bloggers. There's not a lot of you. I was just at CPFC recently, the Canadian Personal Finance Conference, which is organized by Crystal from Give Me Back My Five Bucks, who lives in Vancouver now. And she's like, there's not a ton of us anymore. And she got mad at me for moving away. Yeah, there aren't too many of us. However, I know there's a few here and there now. Maybe there's some new ones popping up.

So maybe we'll hear more about them. Oh yeah. Hopefully that's cool. Um, but yeah, I really wanted to get you on the show because, well, not only from Vancouver, but you're also, uh, a fire person in that you are all about, uh, trying to reach that end goal of early retirement, which not only is that awesome, but I find that I'm so interested to know how the heck you're going to try to do that. Cause you live in Vancouver, one of the most expensive cities in the world. You have a family, uh, you know, you have kids

and you're currently also working a day job and you do the blog and all that kind of stuff. So you're a very busy person. So I would, but before that, like I have a ton of questions for you, but before that, uh, I really want to get a sense of where you come from. What is your background? You started your blog, TalkHan, a little while ago, but I'd love to know where you got the idea for that. And you also talk a lot about, on the blog, dividend investing. So I'd like to kind of jump into that as well. But first, let's go back a little bit uh were you always a big money nerd i am so like my my my dad was uh an early retiree oh was he oh yeah so he retired in his 40s and so we we always talk about money growing up and money wasn't a taboo subject wow

what's that what age did he uh retire at uh early 40s oh wow that is early wow so so we always talk about money and they got my parents got us involved in money subject pretty early on like you know financial decisions and things like that. Oh, that's nice. So I've always been a money nerd per se. And yeah, and I've been reading blogs like yours and other bigger bloggers for a while. And just like, hey, I know a lot of stuff, but do I want to start a blog?

So I was thinking back and forth for almost six months. Because there were stuff that I wasn't comfortable about writing, like net worth, for example, with people on the internet. I still am. I'm not telling people my net worth. I'm just a little afraid someone will somehow figure out how to crack into my bank account. Yeah, so there

are various subjects that i wasn't comfortable sharing on the internet and then i just you know talking to my wife and the more we talk the more it makes sense for me to start a blog yeah so i started one with the rule that one i wouldn't share my net worth and if you look at my dividend portfolio i don't share how many shares we we. So there's some more personal sensitive topics I don't share. Yeah, you kind of keep some things private. Otherwise, I'm pretty open in terms of sharing my knowledge. And the idea was just share my knowledge with other people and sort of journal what I want to do to achieve financial independence early retirement. My focus has always been reaching financial independence rather than early retirement.

Okay. What is the difference actually? What is the difference between those? So financial independence just means your passive income equals or exceeds your expenses. That's pretty simple. Whereas early retirement, like once you get to that point you could retire from your job for example but a lot of people you look on the internet like mr money mustache and a few other folks they still work in a different capacity maybe not like mr

money mustache was i think he was a software programmer but now he works as a carpenter because he likes doing that. Right. So, so for him, it's not a job, but you look at like when his stories gets published on, on the, uh,

major media before it's all your, he's still working and so on, but it's, it's not the same, right? So, so my focus has been finance, financial independence.

And if I decided to retire early, I could do that, but I could still work because I enjoy what I do at work. So it gives me more flexibility and also I'm not setting a date, a specific date when I want to get there. So my whole thing is about flexibility.

So I said roughly say nine years we'll reach that. but really if we want to do it today we could do it like right right vancouver real estate is crazy so yeah move to i don't know somewhere in the world like southeast asia yeah one originally so that that's a lot cheaper there like i'm from taiwan that's why my name is so taiwanese canadian yeah is it cheaper in taiwan i thought it was expensive so well it depends where you are and i mean cost like if you're in taipei um the house rental would be kind of pricey right but food wise is is like right so so it also depends on which area you live right so um or i guess my my wife's from denmark it would be a lot more expensive moving there for sure right but

we could also move say maybe not toronto maybe ottawa would be a little bit cheaper than vancouver right so l'interrail is pretty cheap but yeah french is kind of a thing there yeah so um so so my whole thing is about flexibilities and and just the the whole if you if you check my blog the whole like i i keep talking about finding the right personal balance yeah in terms of spending for today yeah and saving for the future you You can't, you can't. Yeah, sure. We could go the extreme, like saving 99% of our income, but we don't enjoy our life today or we could spend it all and we won't have a future. So, so it's really finding that personal balance. And, and I don't like going the extreme because you're not going to enjoy your life today.

Exactly. And it's like, you can't, it's not sustainable. Like you can be extreme for a bit, but eventually you'll burn out. You'll go crazy. And you might undo all that good work you just did. Exactly. So that was my whole blog. And I also focus quite a bit on life philosophy, like how to be happy. Like things I learned along the way were into a lot of these self-improvement books.

So when I rewind or I talk to my wife about it, then I tend to write an article on that topic. I would love to know your perspective on how to be happy. Do you have the answer? I've been looking. So the whole happiness is about, well, there's two terms. There's a happy and joy. So happy is more external driven.

Okay. There's an expiry date. Right, because happiness, you can only be happy for a bit and then it kind of goes away. So like you get a raise or you get something new that makes you happy. But joy is more internal driven. So, um, like it's like you're at peace or you're, you know, you, you're playing with your kids and you're just like having a joyful moment. And that, that, that difference is, is pretty big.

So, you know, you, you shouldn't try to achieve happiness. I mean, you should try to try to achieve joy. And joy is there's no time expiry, right? Cause if you, if you like right now, if I think about, you know, playing with my kids, I kind of feel joyful. Right. So, whereas you can, you know, think about that computer you bought on Black Friday and you're like, oh, do I really, should I buy that or should I not? It sounds a lot like the differences. Well, you kind of, you mentioned those like happiness.

Those are kind of limited moments. And sometimes they are tied to like maybe a material thing. But it sounds like joy is more toy or tied with experiences and people. Exactly. And so it's like shifting your focus kind of that way. Exactly. And that's why you need to focus, especially when it comes to fire, right? Yeah.

What do you buy stuff? What do you buy experience? Yeah. And, and that's, that's why we focus on more on the experience side, you know, go out traveling, even, even it's okay to go, go out and eat, right? If it's an experience thing. So it, again, it does seem like their shift is on, they still spend and still overspend, but their shift is more on spending their money on experiences rather than stuff. I mean, people still buy stuff, obviously. But yeah, and I'm like, I wonder where that shift came. Is it just because we saw our parents spend a certain way, we wanted to do something

different? Are we realizing, are we all just reading a lot more self-help books? I don't know. Is it because we're realizing that? Yeah. It's like, I, yeah. When I think back to some, like the memories of like some good experiences, hanging out with friends or family going on trips, I feel, yeah, it's like I have this joy feeling. It's not like a happy kind of like, oh, that's nice. And then they forget about it, which is the feeling I get when I buy something I've been looking forward to. And then I'm happy for like two minutes. And then I'm like, it's just a thing.

Yeah. So that's interesting. And I actually didn't even know really that there's a big difference between financial independence and retiring early. Like I knew because also this was another question I had to and it might just be a very simple answer. I feel like lots of people use financial independence and financial freedom interchangeably. Is that accurate?

Are they the same thing? Depends who you talk to. So financial independence, again, it's when your passive income exceeds your expenses. Whereas financial freedom, it's more a loose term. Some people use it interchangeably with financial independence. How I define it is financial freedom means you don't even need to worry about your passive income. So your passive income is so big that it doesn't matter if you change your lifestyle, right?

So for example, say you reach financial independence by having enough passive income for that store number, $40,000 a year. That's your expense. So you could reach financial independence by having passive income for $40,000. So that's times 25, that's a million dollars in your portfolio. Right. that's a million dollars in your portfolio right but that doesn't give you financial freedom because if you're if you're living off 40 000 that probably means you're not traveling a lot you're not eating out loud all that stuff so what if your passive income gives you let's say 120 000 dollars a year that gives you a lot more flexibility so you you could change your

lifestyle a little bit you could you could probably change your lifestyle a little bit. You could probably enjoy your life a little bit, go out, eat, traveling, all that stuff. So that's where I see a difference. Financial independence is more maintaining your current lifestyle versus financial freedom

is you have the freedom to change your lifestyle as you see fit. That's a really good answer. Yeah, that's a really good answer. Yeah, that makes a lot of sense. So now that you are on this journey to reach financial independence, where did you start and what is your journey? What is your strategy to get there? I've been saving since I started university,

but I was putting them in like mutual funds and as we're told to do, you know, that's so, so kind of in my early twenties and I still, you're investing in like university days. Like that's probably ahead of the curve still. I hope, I guess so. And then, and then just as I learned more about stocks and so on, I bought a stock before the financial crisis. So that went down quite a bit. Yeah. But then at the same time, the interest rate went down. So I was like, oh, I could hold this stock.

It was paying dividend. And I was getting better rate than otherwise in GIC. So I was like, okay, I'll just keep holding that the bank is it's uh intact financial used to be called ing yeah and back then i didn't even know i like because there's the bank right yeah ing bank which is now uh tangerine i was like oh i didn't even know it's different so i was like oh i know the company so i'll just control it and turns know it's different. So I was like, oh, I know the company. So I'll just continue to hold it. And it turns out it's two different segments. And I sold it to, Angie later sold it to Intact Financial. But then, like, I know the insurance company as well,

because we use them for house insurance. My parents do. Yeah. So I just continued holding it, holding the shares, and thinking, oh, it's not going to go bankrupt. It'll probably come back. Yeah. And it did.

And, you know, I've been getting dividend and the dividend keeps increasing over the years. And, yeah, I got money, my money worth back from, I think, dividends. And then share price has been increasing. This has been, what, 10 years? Oh, wow. So that was my first dividend stock. And since then, I mean, I was investing dividends in stocks and other non-dividend paying stocks,

but my core has been dividend stocks. Yeah, I want to just stop you there because I feel like there may be a few people listening that may not know. Like, they're just starting to learn about investing. You mentioned that there's two kind of types of stocks. There's ones that pay dividends. There's some that don't.

Do you want to explain that a little bit further so people can understand like what is the difference between the two? Sure. So stocks typically accompany what IPO to get money from the market, right? So you see Facebook, they needed more money to bring into their company so they could invest that money. So they went IPO to get, and then the stock price shot up because people thought Facebook is a good company. So a lot of these companies, they IPO, so they get their stock listed on the stock market.

And that's a way for everyday people like us to own a share of the company. And most of these companies, because they're still trying to grow their profit, they don't pay out any dividends. So they want to reinvest the money they get from their, like they want to reinvest their revenue. Whereas their company, they're so big, they feel rather than reinvesting this revenue profit, they could share the profit to their shareholders. So these are typically bigger companies like, you know, Procter & Gamble, Johnson & Johnson.

Apple started paying dividends a while ago because they're just sitting on billions and billions of dollars, right? So that's the difference. So typically, dividend-paying companies are bigger. They're more mature. They could give money out to shareholders. I feel like, okay, I totally see the benefit in investing in companies that give dividends. Thinking that investing in stocks that don't pay dividends, well, maybe eventually if I get in kind of early because they are, you know, young and growing and I feel like their value will increase, you're kind of just getting on the ground floor. And eventually, hopefully they will be like Apple where they do eventually pay dividends.

Is that kind of the strategy? Yeah. So on my blog, I only talk about dividend stocks. And also I do invest in ETFs, index ETFs. So I do a high-grade approach. So that's my core. So I invest in dividend-paying companies and index ETFs like Vanguard ETFs and such. So that's my core.

And I do also invest on the more, call it riskier stocks, like non-dividend paying stocks, for example. So like the Facebook, the Google, the Amazon, those are bigger names. All three of those don't pay dividends, but they're sitting on billions and billions of cash in their bank account. So eventually they might start paying dividends.

So the argument with with people with some people is that oh you're investing in dividend stocks those are more conservative more mature companies whereas non-dividend paying companies they might grow faster right you look at facebook amazon so so i do my core investing in dividend and index ETS. And then outside of that, a small percentage of my portfolio, I then do the... Dabble. Yeah, like, you know, it might grow 10 times. So it's more riskier.

That's why I don't talk about it on my blog. Right. Because it's like, yeah, there is the risk that it could not do well, but there's the risk that it could. And that's why, as you kind of mentioned, it's good to have a good balance. You want to be diversified. You don't want to just invest in individual stocks and that's it. Because, you know, you're just investing your money in a limited amount of assets.

So you want to be kind of more spread out in case something happens. Because, yes, another recession will happen. This is cyclical. These things happen and and for the most part if you if you're just starting investing index etfs is a is a good idea because you know picking dividend stocks do take a lot of time yeah so yeah like how much time and research did it take for you to really decide on like what i'm going to invest in like it's you know quite a bit of work it is i mean by now my our portfolio is maybe i think to be honest we hold too too many stocks so our dividends portfolio we i think we hold like something like 60 individual stocks would be good to trim it down to somewhere around 40 to 50. So yeah, it does take a lot of time too

because you need to look at typically high. There's a website that some people put out, like for example, all the Canadian dividend companies and the ones that have been raising dividend over the years. And so you get a list and then you start filtering. You look at p ratio the payout ratio dividend growth rate and then that's kind of my initial um filter and then once i pick a few like say 15 then i do a deeper dive like you look at the pay ratio you look at their their

p their earning over the years yeah um you start looking at their financial reports like quarterly results and annual reports yeah and you you could and start looking at their balance sheet and that that's where it gets takes a lot of time yeah right so so life and and the thing is if it's say royal bank right that's one of the biggest yeah banks in canada it's a solid company so so the the thing you need to if you're buying royal bank to be honest you don't really need to do that much research right it's just it's a solid company it just you need to figure out at what price it's it's good right and that's a that's that's a tough thing to do and i guess kind of like what lots of people do is you can kind of make um i don't know what the proper term is but kind of

a test account so you don't have to like put in your money but i know i think google has one and there's a couple ones where you can kind of yeah practice account basically which is i think always a good way to get comfortable and you'll realize how emotional it can be when it goes up and down like yeah they're actually i don't know if they're still these websites because there used to be like when i was growing up um there are these websites you start with fifty thousand dollars and you could you could you could compete with other people for say a month or or three months kind of thing so so that's a way to get your your feet dirty yeah um but yeah it it does take a bit of time to to do the

research especially when you get to get to smallerpaying companies, the ones that are just starting to pay dividends and you don't know them that well. So that would require a bit more research and just evaluate. That's why, again, that's why I think if you're starting out today, index ETFs is the way to go. Pick three index ETFs,

a Canadian one, a us one well a canadian one international and and bond yeah bond is another touchy subject because is it well i think i suppose what's the formula i think it's um you're supposed to own certain percentage bond based on your age. Right, yes. That's been a historic – I don't even know the formula. I should. Yeah, but yeah. But with the low interest rate today, I don't know if that makes sense. Because you're parking that much money in bond, earning less than 1%.

Yeah. Is it really worth it? Yeah. So I think that formula needs to be changed slightly. I mean, we do own bond, but not as much as what we should according to the formula. So how did you figure out, I guess,

it sounds sort of like you are kind of following that kind of couch potato investing method. Is that kind of like, how did you kind of figure out, like talking more specifically about index funds, ETFs? How did you figure out, you know, to do it? I know a lot of younger people, that's why they're kind of going to robo advisors, because it makes it very simple to start. But it sounds like you do it yourself. So how did you kind of figure out how to do it yourself? Well, right now we own two index ETFs. So the Canadian, I think it's VCN from Vanguard.

So that's the Canadian one. And if you look at the top 10 holdings we own, I think we own 9 or 10 out of 10 of these stocks in our dividend portfolio. And then the other index fund we own is VXC, which is the Vanguard X Canada index. So outside of Canada. So that's my exposure for international zones, for US and other areas.

But in terms of what to pick, yeah, I follow the Canadian Couch Potato. That's a great website. Great resource, yeah. Yeah. And Dan has this model portfolio that you could build your portfolio. Thank goodness for his model portfolios because so many people use them, and they're so helpful.

Yeah, and it's a lot easier now, right? Because with Vanguard, you now could just invest in Canadian currency. It used to be, I think a couple years ago, his model was like five different index funds and i think two of them the u.s and the international are in in u.s currency so you're constantly having to change back and forth exchange currency it's a lot more complicated than today yeah so i i think that's a great great base to start with index ets and then if you want to venture out to dividend investing you could start doing that and yeah and you know there are ways to pick

dividend stocks for example you could you could look at um look at a few that's the canadian right so canadian you could look at a few uh canadian index etfs like the Vanguard, the iShare, and then look at their top 10 holdings. I could tell you what the top 10s are. Usually it's Royal Bank, TD, probably Bank of Nova Scotia, Enbridge, Manulife, SunShare Financial. Yeah, all those. And you could then start buying those individually, right? I guess what's a good way for people to really,

because I think what I hear from a lot of people, they're like, okay, I sort of understand the principles, but how do I actually do it? Or how do I find out what's in that fund? What kind of websites or resources do you use to kind of do some of your research to find a little bit more information? Right, so if you want to look at,

I have written a blog post on it. Okay, I will absolutely link to that in the show notes to make it easy for people. But yeah, in terms of ETF breakdowns, you just go on their website, so vanguard.com, I think vanguardcanada.ca. Okay. And you just click on the index ETF,

so VCN, for example, and then they'll tell you. What's in there? A summary. Yeah, you could see the entire list. I think it almost like, don't quote on me, like something like 200 something stocks.

Wow. And then you could just look at, you know, say top 10. And then you go to iShare and other index companies and look at their breakdowns. Typically for Canadian indexes, it's pretty much the same because there's only a few top Canadian companies, right? And so that's one way. And then there's uh drip investor.org i should know the yeah drip investing or drip investor okay i'll look it up yeah i could yeah i could sing a link later um but yeah they they have these uh they're a couple folks they put out these uh sheets each month. One is for US dividend stocks, and then the other one is for Canadian dividend stocks.

So they kind of rank by how many consecutive years the stock has been increasing dividend by, and then all the financial data and parameters and all that stuff. So you go down the list, and then they divide them into sectors and stuff. So it's a lot of stuff to learn, especially once you want to get into the whole diversification. You want to own a certain percent in a different sector. You don't want to invest everything in banks, for example, or everything in oil and gas.

So you want to diversify. And that's a tough thing with canadian market because we're so financial and oil and gas yeah um heavy so that's where if you want to invest in u.s stocks that gives you more diversification totally like johnson johnson procter and gamble those are like big international brands, right? Apple, for example. Yeah. So it gives you more flexibility.

And the other thing, I'm just talking. Yeah, I know. This is great information for people. Yeah. The other thing is you also need to consider TFSA and RSP, right? Yeah. Because that's another thing you really need to consider income tax. Yeah, so that's another question for your kind of dividend stocks.

Do you house them in an RRSP or a TVSA? Yeah, so I own U.S. dividend stocks only in RRSP. Because if you own U.S. dividend stocks outside of RRSP, then you have to pay 15% withdrawal withholding tax. Yes. That can be expensive. That's pretty significant, right? Yeah.

Yeah. So say Apple gives you 2% dividend and you're getting 15% of that. Yeah. That's pretty significant. So I only own U.S. dividend stocks in RRSP. And then with TFSA, I own, like, if there's any real REITs, their real estate income trust, I own those. The Canadian ones, I own those in TFSA.

Because with REITs, if you're investing in regular accounts, in taxable accounts, and especially if you're dripping, drip means dividend reinvesting plan. Right. If you're dripping the REITs, it's really, really, really, really complicated to calculate your taxes. So I try to simplify my taxes by only investing in REITs and income trust in TFSA so i don't have to worry about those and for for taxable accounts i own like the canadian stocks

that gives you eligible dividend so like the royal bank the tvs those you get tax credit so you're you're more tax efficient that way okay good so good. So yeah, so that's another thing. It's like not even just thinking about what to invest in, but where to put those investments, what kind of accounts. And it makes a big difference. You have to, uh, yeah, but yeah, I think, uh, what you've done is, uh, uh, pretty common from what other people have told me. It seems like a very good, uh, smart strategy to be tax efficient because yes, we want to pay our taxes, but if we can, uh uh save a little bit why not yeah and then my my other big thing with the whole fire yeah concept is how to withdraw money efficiently

that's another whole topic that that's a whole i know right that's a whole other thing and especially rsp like because you're technically not supposed to withdraw. I think it's 71. I believe, yeah, it's like on your 71st birthday or 72nd birthday or something. But you can withdraw early. So there are different strategies. That's one area I'm still trying to learn and explore. You got some time probably before you need to dip into that. Talking to different Canadians that may already, maybe further ahead than me so I can dip into them. Talking to different Canadians

that may already, maybe further ahead than me so I can learn from them. Definitely. Yeah. Yeah. Awesome. Well, I feel like I've learned a lot.

So I guess my kind of last question to you, and this is kind of something that why I got so excited about this kind of fire movement that I feel like I'm like, I can't believe I had no idea this was even kind of a sub community within the personal finance community, but it's really cool. But what I really think I loved most about it is

it wasn't just for specific people that made a really high income and were going to be wealthy and can retire early, which is usually I think the concept that's usually what people think. You have to be rich to be able to retire early. But it kind of seemed like the whole movement of fire is actually about how, you know, kind of like, you know, Andrew Helm from millionaire teacher, you don't have to you can you can actually achieve early retirement or financial independence. On an average salary, you just have to make certain choices with your money. So like, I guess my kind of question to you is, do you, do you kind of think like what you're doing, it could probably be replicated by almost everyone if they kind of just start making some of those choices and start really paying attention to

their money and investments? Oh, for sure. I mean, we're, we're a single, single income family, right? So it's huge. Like I work, my wife stays at home with the kids. So it's definitely possible. It's all about choices you make in life, right? It's about cutting your expenses. And obviously, to a certain point, you're still enjoying your life. And when it comes down to it, if you're saving 50% or more, you could do it one day.

It's a matter of time. Even if you save 40%, or more you could do it one day it's a matter of time you know even if you say 40 30 you could do it if you start young yeah it may just take a bit longer but possible and and if you're in your 40s 50s you you would need to save more it's simple math yeah so so yeah it's totally doable and and you know it's about again the choices you make in life right if you go again i i go back to i like to use the latte factor a lot yeah because they're like oh don't spend two dollars or i don't know that is like say five dollars yeah it's like a five six dollar drink now if you if you say five dollars a day and so on and so on, but I'm like, yeah, but it's something you enjoy every single day. Don't take that enjoyment away from your life. Yeah, if it brings you joy, do it.

Exactly. Or even just like a brief moment of happiness. That's a thing that really kind of drove me nuts when I started because my wife is all about their Danish words called hygge it's about I love that word so much it's about be cozy right yeah so like having a cup of coffee together sit around and talk right so she's all like oh let's go I'll have a nice cup of coffee and then like go to the chocolate store and get some coffee and get the chocolate and enjoy the moment right and on the back of my mind like this is like years ago i'm like but we're spending like this amount of money and so on so

on but now i kind of changed around like this is totally worth it yeah and you know there are other areas we could yeah there's other areas not going out for for food, you know, saving money on other expenses. Totally. So, again, finding the balance and making your choices in life. Totally. But, yeah, I think back to your question, I'm kind of going off the tangent. Yeah, no, no, I like it. Yeah, I think FIRE is totally, totally, totally your with your average salary um like even if you start starting

young totally do it totally could do it a funny story um um um christy took a picture millennial revolution they took a picture at think con and i was in it and uh turns out a high school friend like I haven't really been contact sold a picture on on her website and then realized it was me and it turns out he was he's already fi since 32 oh my gosh oh my god I found somebody I could talk to about fire and so on so on so we started talking on Facebook. So, you know, it's totally do it, totally doable. And it helps to be part of a community that's supportive of each other, which I'm all about. Like, I feel like that is absolutely the reason that I think I've stuck to my guns and been so like diligent with my finances and what I hope to kind of share with

other people is like being a part of a community to talk about it openly will help you reach your goals because you don't want to feel alone like that's how you just won't do it and I find there there are a lot of uh American fire bloggers or the American fire community is pretty big yeah and and I think looking at it I think a lot of people realize like during after the financial crisis, there are more FIRE folks because people just realize it's not, you know, you can't depend on your job. Your job, yeah, exactly. So I think that's the point where FIRE grew pretty big.

But I really wish there would be more FIRE folks in Canada. Hopefully after this episode, you'll inspire people, Bob. Yeah, that would be good. It's so different between U.S. and Canada, right? I know. Canada, we don't have to care about'll inspire people, Bob. It's so different between us and Canada. I know. Canada, we don't have to care about the healthcare. Hopefully. Thank God.

We're so lucky. Yeah. But, but just the, you know, TFSA RSP is, is completely different than us. So, so the more, the more fire people we have in Canada, the better, because then we could, we could learn from each other, you know, talking about the different strategies. Yeah.

So, so yeah, if you want to, if you're listening to this and you want to get to reach out to Bob, yeah, reach out to me and start today and yeah, I'll be great. I mean,

I'm, I could always learn. I love learning from other people and talk about various topics. I mean, you know, I, I'm not an expert or anything. I'm just on my journey. And I love learning from other people and talking about various topics. I mean, you know, I'm not an expert or anything. I'm just on my journey, right? Yeah, you're doing it. If somebody was on the journey, we could learn from each other. That would be great.

Absolutely. Well, thank you so much for taking the time to chat with me about this. I feel like this is a subject that I have not really had on the show. So I feel like it's going to be a really, it'll open up people's eyes as it did for me when I learned about FIRE. I'm like, oh, this is awesome. You mean I could do this?

Heck yeah. So thank you so much. Before I let you go, where can people find you if they want to learn more information? You could find me on my blog, www.talkin.com. That's spelled T-A-W-C-A-N or just Google T-A-W-C-A-N. Or I think if you Google my name, Bob Lai, L-A-I, you'll find me. Although the first one might be my photography. I know there's another. Yeah. Awesome. Great. Well, thank you again. It was a pleasure chatting

with you. No problem. And that was episode 141 with Bob Lai from TalkHan. You can check him out at TalkHan.com and that's spelled T-A-W-C-A-N for Taiwanese, Canadian, easy peasy to remember. But again, you can also check out the show notes for more details about everything that we talked about at jessicmorehouse.com slash 141. And even though Bob, and I absolutely loved it that he really did kind of go in depth about what his personal investment strategy is, it is maybe not something, maybe you're just like, ah, that sounds a little bit more advanced than I'm used to. If you're a beginning investor, I don't want this to kind of put you off or scare you off. Because the important thing with investing is literally just starting. Starting as soon as you possibly can. It off. Because the important thing with investing is literally just starting,

starting as soon as you possibly can. Even though I'm not perfect, I have absolutely made some mistakes in my personal finance journey. But one thing that I did get absolutely right, even though I did make some mistakes in between, is getting started as soon as I can, which was in my kind of mid-20s. And now I'm in my early 30s. I'm so thankful that I did start to even put like $100 away at the time. Again, it was Tangerine Index funds. Because even though I felt like that really wasn't that much money, well, fast forward seven, eight years, it has grown and grown because I kept on adding to it. Whenever I started to earn more money, I would kind of increase that amount. And now I'm quite

happy with the trajectory of my investments and also hope to, like Bob, achieve financial independence with my husband one day. So I don't want you to feel like you have to invest in stocks to do what Bob is doing. Start small. Start with some kind of strategy that is simple and that works with your risk tolerance. And just don't be afraid to even get started. If you have any specific questions, hit me up, Jessica at JessicaMorehouse.com. And Bob also is so happy to help too. You can email him and there's some information about that in the show notes and on his website. Now, I have a couple of things that I definitely want to let you know about. But before I get to that important information, here's just a few words about this episode's sponsor. Support for this episode comes from Tangerine Investments. I don't have enough money. I'm worried that I'll lose it all.

I don't know enough about investing. It's just too complex for me. Have you ever thought like this before? You're not alone. But that still shouldn't stop you from investing your money and putting it to work toward your financial goals. And a great way to do this is through long-term index-based investing, which you can do easily through Tangerine. Tangerine offers low-cost, diversified investment funds. And the best part is, you can get started without ever having to leave your couch. You can learn more at tangerine.ca slash investments. Once again, that's tangerine.ca slash investments. Okay, so some important info that I definitely don't want you to miss out on. So first,

my next book club is coming up super, super quickly on Wednesday, February 7th at 7pm Eastern Time is when I'm going to have my next book club. We are currently reading The Year of Less by Kate Flanders, who will also make an appearance on the podcast this season. So look forward to that. But basically, if you're new to this whole book club thing, I started it back in the summer as a way to kind of promote financial literacy and get people excited to read financial books and to just, you know, make them aware that there are some really damn awesome, not dry and boring financial books out there, I promise. And so this is number four. And basically, it all takes place on Facebook. I do a Facebook Live with the author this time. Kate will be joining me.

And we're going to broadcast it live on my Facebook page and also in my Facebook group, the Money Life Balance Community. And basically all you have to do to take part is read the book, write down and note down any questions that you have to ask the author about the book. And join us live Wednesday, February 7th at 7pm Eastern Time on my Facebook page or in the Facebook group. And then ask your questions live to Kate. That is it. It is a really cool opportunity to read the book and get to know the author and ask your burning questions in real time. So I hope you join us for more information and to make sure you get notifications about it. Just go to jessicamorehouse.com book club. I'll also include notes about this in the show notes. So check those out too. And now I want to do something that I have not done for a while. I'll also include notes about this in the show notes. So check those out too. And now I want

to do something that I have not done for a while. I didn't do it throughout the whole season five. Sorry, forgive me. But I've been getting a ton of iTunes reviews and I really appreciate it. So it is my time to give back and give some shout outs to some awesome people who left me some lovely iTunes reviews. This one is from Shy2526 from Canada. I've been listening to Jessica's podcast for the last year and really like her down-to-earth approach. A lot of money podcasts talk just about debt or complicated investments, but Jessica has a good variety of all money topics and it is always easy to understand. She has a range of guests and always pipes up with her own life experience as well. I cannot help myself.

I do like to talk. Please do a Millennial Money Meetup next time you are in Vancouver. And this was actually given to me June 28th. So I did. I went to Vancouver. I did a meetup and I can't wait to do another one. One more. This is from Greek Canadian from Canada, obviously.

They say, trying to pay off my line of credit debt and this show was just what I needed since I have lots of time on my hands because my job involves driving countless hours on the highway. Jessica being a Canadian and not taking herself too seriously is definitely a bonus. Keep it up, Jess. You're right. I do not take myself seriously because if I did, I would probably get a ton more evil reviews. Believe me, I get some nasty reviews, but they never get shout out, so you'll never know what they are. All right. Let's do a couple of good ones after that fabulous one. This one is from Movie Hound from Canada. Podcasts are well thought out and contain valuable

information. All right. Simple and to the point. I like it. Efficient, efficient. Last one for today, Stacey from Sudbury from Canada. Ooh, one of my fave podcasts right now for sure makes the time on the elliptical fly by. You're so genuine and relatable and likeable. I love it. Ooh, a little emoji of like a, what was that? The fingers, you know, when the fingers are like yeah perfect or yes spot on anyways i i don't i'm not very good with my emojis but thank you for the emoji i love emojis um and thank you everyone who left me a review i'm going to try my darndest this season to get through every single review and give every single person who left me one a uh special shout out on an episode so keep them coming all you have to do is go to iTunes to

leave me a review. It takes like a minute. You can do it on your phone while you're just like waiting for somebody. Also Stitcher. If you leave me a review on YouTube, wherever you want, give them and I will give back and shout you out. Thanks for listening to this episode. I'll see you back here tomorrow because I have a listener series episodes you will not want to miss. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.