Podcast | Kristy Shen and Bryce Leung – Millennial Revolution

On board today is Kristy Shen and Bryce Leung from Canada, also from the popular blog Millennial Revolution. Kristy and Bryce are the authors of the book ‘Quit Like a Millionaire’ and they reached FIRE in their early 30’s, now enjoying travelling, writing and helping others! Strap in, it’s a long one but a juicy one!

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Kristy Shen and Bryce Leung – Millennial Revolution

On board today is Kristy Shen and Bryce Leung from Canada, also known from their popular blog, Millennial Revolution. Here’s a quote from our guests, ‘Money is the most important thing in the world’. Maybe a bit of a controversial take.

Whilst having money is certainly no guarantee of happiness, poverty is sure to make you miserable, and no one knows this better than Kristy, who has seen both ends of the wealth spectrum. Despite growing up in poverty and, at one point, living with her family on 44 cents a day, Kristy Shen, along with her husband Bryce Leung, went on to become self made millionaires at the ripe old age of 31 and 32, going on to retire only a few years later.

Now, 40 and 41 Kristy and Bryce have spent the past decade traveling, exploring new cultures, spending time with family and friends, helping others succeed with their financial goals, and expressing their creativity as authors and publishers, both in personal finance, but also, interestingly, with children’s books.

How did they do it? Well, as students, analyzing potential career paths, they weighed up training costs, effort, and future salaries to work out their optimum return on investment, and the pair both very mindfully chose to work in the developing field of software engineering.

Kristy’s heritage taught her to avoid debt at all costs, and the importance of a high savings rate. Kristy and Bryce took it to the next level, saving and investing on average 80 percent of their large software engineer incomes over their nine-year working careers. In 2015, they pulled the plug.

They retired from their engineering jobs to FIRE and travel the world together. They blog at Millennial Revolution, and have published the book, Quit like a Millionaire, which I found particularly helpful and inspiring on my journey to FIRE.

They believe that money is the most important tool we have to improve our quality of life. Kristy and Bryce swear by the numbers which led them to financial freedom and enabled them to pursue their passions for travel, writing, and helping others.

Jump on board, this one’s a long one but Kristy and Bryce were just so inspiring to chat to!

kristy shen and bryce leung


Episode 64 – Kristy Shen and Bryce Leung – Millennial Revolution

Okay, by a show of hands, who loves working a stressful, hateful job for 30-40 years, to pay off a massive mortgage, only to die of a heart-attack at your desk or be laid off without a pension? Anyone? Anyone? Yeah, I thought so. That’s how we felt too. And since we lived in one of the most expensive cities in Canada, that was a real possibility. So instead of drowning in debt to buy a house, we rented and invested instead.

And guess what? Going against the status quo TOTALLY PAID OFF!  By NOT buying a house and investing instead, we managed to build a 7-figure portfolio, which has allowed us to retire in our 30s and travel the world! BOO-YAH!”

Kristy and Bryce – millennial-revolution.com

Show Notes


Episode 64 – Kristy Shen and Bryce Leung – Millennial Revolution

Kristy and Bryce

Captain Fi: [00:00:00] Ladies and gentlemen, this is your captain speaking.

G’day, and welcome to another episode of Captain Fire, the financial independence podcast, where I open the cockpit to some of the best and brightest in personal finance, as well as those who have reached or are on their way to financial independence. Before we get started, remember, nothing said here is financial advice, and you should always do your own independent research before making any financial choices.

With that being said, I hope you enjoy the episode and learn something new.[00:01:00]

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On board today is Kristy Shen and Bryce Lung from Canada, also known as the firecracker and the wanderer from their popular blog, millennial revolution. Now I want to start with a quote from our guests, which is ‘money is the most important thing in the world’. Maybe a bit of a controversial take.

Given we’re told pretty much the exact opposite every day. Again, usually from people that have money though. Whilst having money is certainly no guarantee of happiness, poverty is sure to make you miserable. And no one knows this better than Christy, who has seen both ends of the wealth spectrum. Despite growing up in poverty and, at one point, living with her family on 44 cents a day, Christy Shen, along with her husband Bryce Leung, Went on to become [00:03:00] self made millionaires at the ripe old age of 31 and 32, going on to retire only a few years later.

Now, 40 and 41 Kristy and Bryce has spent the past decade traveling, exploring new cultures. Spending time with family and friends, helping others succeed with their financial goals, and expressing their creativity as authors and publishers, both in personal finance, but also, interestingly, with children’s books.

So, how did they do it? Well, as students, analyzing potential career paths, they weighed up training costs, effort, and future salaries to work out their optimum return on human investment. And the pair both very mindfully chose to work in the developing field of software engineering. And Christy, I believe that’s where you met Bryce, at university.

Kristy: Yes, it was very nerdy and we met as lab [00:04:00] partners, believe it or not. Hey,

Captain Fi: lab partners, christie’s heritage taught her to avoid debt at all costs. And the importance of a high savings rate, something I credit to my own Chinese and Scottish heritage. It’s actually pretty stark when you consider the national saving rates averages.

Chinese citizens lead the way at around 38%, whereas even Australia and the USA have a paltry 5 and 4 percent average saving rates respectively. But Christy and Bryce took it to the next level. Saving and investing on average. 80 percent of their large software engineer incomes over their nine year working careers in 2015, they pulled the plug.

They retired from their engineering jobs to fire and travel the world together. They blog at millennial revolution. And I have published a memoir come how to guide quit like a millionaire, [00:05:00] which I found particularly helpful and inspiring on my journey to fire. They believe that money is the most important tool we have to improve our quality of life.

I mean, think about it. If you want to look out for the people you love, you need money. The more, the better want to spend more time with your kids. Ditto. How about creating time for leisure, reading, going to the movies, discovering new countries and cultures through travel? Yep, you’ve guessed it. It’s the same answer.

Money. Ruthless optimizers. Christie and Bryce swear by the numbers which led them to financial freedom and enabled them to pursue their passions. for travel, writing, and helping others. So a bit of a mouthful, but Christy, welcome to the pod. Awesome to be chatting to

Kristy: you. Thank you so much. So happy to be here.

Captain Fi: Before we get started, do you reckon you could tell us a little bit more about yourself?

Kristy: Yeah, sure. So, one of the reasons why [00:06:00] I decided to pursue financial independence, was like you said, I grew up in poverty. But one of the other reasons I think we have, we understand each other and we have that in common was the amount of stress that I had at work and how I could see that our jobs are becoming less and less stable over time.

And as you can see, after the pandemic, pretty much every sector was affected and you really don’t know what’s going to happen. There’s a lot of things outside your control and you really cannot rely on the government, you can’t rely On your job, and for me, I definitely couldn’t rely on my parents because they were still taking care of family members back home in China, so they couldn’t just, support me for the rest of my life, so that is what drove me to financial independence, and basically, what you were saying about the controversial statement of money is the most important thing, yeah, I get that a lot when I say that to other people, because they’re like, how can you say it’s the most important thing what about relationships, what about love, what about health, And the interesting thing is having that type of childhood growing up on 44 cents a day is that if you have money, you won’t [00:07:00] think money is the most important thing.

 If you can breathe, you don’t think about breathing. You don’t think about air. But if you are swimming and all of a sudden you’re drowning and you don’t have air anymore. Air is the only thing you could think about. It becomes the most important thing. Just if you don’t have relationships, then relationships become the most important thing.

So, it really is my background of growing up in scarcity and not having money that drove me to make sure that I don’t ever have to rely on the government or my parents or a job to get to financial independence. And that’s one of the reasons why we were able to travel for the last 10 years.

And there’s going to be something we’re going to talk about a little bit later about what happens 10 years later. Some things that you don’t anticipate, which is your parents growing older, having to spend more time with family having to do some caregiving, which you’re not expecting.

And I realized that money isn’t just for buying freedom, it’s also for taking care of your family. And that has made me realize… Another aspect of FI that I wasn’t setting out [00:08:00] to care about in the beginning, wasn’t thinking about that, but now I realized the value that it’s providing, which is the time to, to actually give me so that I can help my family as much as possible.

Captain Fi: Yeah, look, , it’s an area which hits home a bit for me as well. I think family health was. And my own health was a huge catalyst for me leaving my previous job. And I’ve talked a little bit about it on the blog before having , both parents with terminal cancer and yeah losing my mom was really hard.

And if you don’t have the financial stability to do that. It’s such a hard position to be in. I ended up becoming my mom’s primary carer. And I’m so grateful for the opportunity to be able to have that time with her and to be able to, try and improve her quality of life.

And we’ve always had a very special relationship. My mom worked so hard. So single mom big family, I’m just thinking like 44 cents a day is insane. I can’t [00:09:00] imagine trying to live on that. Certainly mom was a low income earner, working part time as a teacher. And I think, I was looking over some of her old financial records after we were sorting the house out after she passed and, she’d really never earned the equivalent in, I guess, Australian, like today’s dollars of, , around $35, 000.

And, going back to the nineties when I was a kid, I think that’s maybe $ 30 to $40 a day. And it’s weird to think that like in Australia that, that. level is the poverty line. And then you like contrast that to, China and the 44 cents a day. That’s like a factor of a hundred.

It really puts things into perspective. And, I look back on my child and I think what an amazing childhood that I had, yeah, sure. We always had electricity, running water, food, clothes, heating, cooling,

didn’t . Sure we didn’t go to to like concerts and travel on holidays and stuff, but we still had an amazing childhood. So for me I think it definitely puts things into perspective about just how good we [00:10:00] have it in countries like Australia and Canada and people living in the U S but yeah, it really is.

I think with, money it’s funny. Vicky Robin said it best, right? Money is life energy, and it gives you options

Kristy: for sure. Yeah. I’m so sorry to hear that you lost your mother. , it’s very difficult and we really don’t know what’s going to happen. Like how much time we have left.

And you’re absolutely right that it really is about perspective, right? Like when that’s one of the things that was very helpful growing up because my parents had it way worse than me. It could always be worse. That’s like their favorite quote of all time.

And like you said, like some of the things that we take for granted. In North America and Australia and in Europe, where we don’t think about the fact that we can just turn on a tap and there’s hot water coming in and there’s heating in the wintertime. And that’s not something a lot of people have growing up in their childhood.

It’s I think for. Like when I was little, I remember washing myself with well water that had to be like heated or sometimes it’s just cold. Right. And I’m like way too soft and marshmallowy to deal with that [00:11:00] now. But just having that perspective of knowing where you came from and knowing how much worse it could possibly be.

And all these things that we take for granted really helps you have that perspective to get through the really difficult times.

Bryce: Oh, just just a quick note. I’m back on the call now.

Captain Fi: Awesome. Did you want to take this question as well, Bryce, and tell us a little bit about yourself as well?

Oh, sure.

Bryce: So, I grew up in Canada, so I have a different perspective on money than Christy did. Christy came from a a background of extreme scarcity. Right. and what I realized is that both of those approaches having that experience of poverty really does give you the ability to optimize and to really stretch the value of to get the maximum amount of value out of every dollar that you do spend.

And that’s something that you don’t get when you are growing up in a kind of a more middle class lifestyle. But at the same time, it does hurt you when you’re trying to learn how to invest. So really to do this fire thing, you really need both, right? You need to be able to do the optimize and drive your spending down to as [00:12:00] little as possible, but while at the same time making sure that you don’t sacrifice your quality of life, but at the same time, Take that gap that you save and then invest it and turn it into a passive income.

So, it’s been an interesting journey. You seeing how our, both of our approaches melt together to turn into this whole, fire thing, which has been really cool. And yeah.

Captain Fi: So since the fire movement has exploded in recent times we’ve seen the concept. Kind of meaning many different things to different people in that not everyone wants to retire. Some people love their jobs But we do all need to reach financial independence So speaking of which as a couple who’ve reached financial independence over a decade ago What does financial independence mean to you?

And how has that changed?

Bryce: Initially, I think we both approached or Christy specifically approached FIRE as a way to get out of a shitty job.

Kristy: Right? Yeah, and having financial security.

Bryce: And security. As we’re getting old, and then there was a decade that she [00:13:00] mentioned earlier, there was a decade of traveling and really discovering the world and seeing what the world had to offer that was just beyond our backyard.

And that part was really cool. Now I’m realizing that financial independence is, it’s morphed because we’re getting older both sets of parents are getting older. Right now I’m actually dealing with a a kind of some pretty serious health issues on my parents side.

And I’m realizing that fire really gave me the freedom to drop everything that I was doing and then just come home and really just be present and, be able to help in a way then just to help my mom take care of my dad in a way that people who have a full time job really can’t, they can’t just come home and then stay up here for weeks on end.

And then just being like a live in personal support care worker, so FIRE it’s been really interesting because FIRE went from this fear based thing, like I want to get away from my crappy job, to a freedom and a happiness thing. And then now it’s becoming like I have the opportunity to really be [00:14:00] present and take care of my parents and to help out as much as I can.

So it really, like the through line on there is. Is freedom, right? The ability to spend your time how you want and spend it with the people that you love doing what you love to do, or in some cases what needs to be done without having to worry about, where’s my next paycheck going to come from?

Am I going to lose my job? And so yeah, , it’s definitely changed over time, but I wouldn’t go back and. Change any of it for the world because of just how much richer our lives have been because of it

Kristy: Yeah, I think it actually helps you Live your life to be aligned with your values, right?

because when you have to have a job It really is like you’re juggling things all the time and your priorities change and sometimes there’s something that’s more important to you But you also have to make money. You also have to depend on a job So you can’t always follow your values But in this particular case now our biggest value is our family and that’s what we’re going to put everything towards and we have the ability to do that [00:15:00] because It gives us the choice to be able to do that versus if we had to work, we have no choice and we have to balance the two.

And sometimes you have to put work in front of a family, even though that’s not exactly what you want.

Captain Fi: Well, I I can relate so heavily to everything you guys have just said. I think we have a very similar lived experience. And Bryce, I know you’re off the call just earlier when Kristy and I were chatting, but yeah, I basically said that I’ve gone through a very similar thing to what you guys are doing now.

And yeah using fire to escape from, I guess, a very stressful job and also with family health emergencies. And, I was very fortunate to be able to get some time with my parents with mom, especially to be her carer before she passed. And that’s time you never get back.

And if I was still in aviation flying, maybe You know it basically reached a boiling point with my employer where, they kind of said, you can’t really have any more time off bouncing off currencies and that kind of stuff. And I think you just have to make a call at some point.

And I love what you said, Kristy about how it allows you to live a life [00:16:00] aligned with your values. Because I think, maybe a lot of people should really introspect and see what. Do they actually value I was reading a book recently called Essentialism and I’m muddling up the quote here, but he goes on to say something like, if you don’t deliberately make a choice, someone else will choose for you.

And I think, yeah, a lot of us can fall into that trap. So I guess perfectly leads into my next question, which is obviously quit like a millionaire and your journey to financial independence. So guys, how did you do it? Spill the tea.

Kristy: The interesting thing is we actually were not planning to go the fire route initially.

I was very much going down the home ownership route. , I was following the blueprint to success that has been handed to us like generation to generation. And my parents were bugging me about this a lot, where you’re like, you need to buy a house that’s financial security.

You need to work until you’re 65 and you need to get a pension. And that is the blueprint to success. Don’t deviate from the plan. Unfortunately completely outside my control. The plan [00:17:00] doesn’t quite go the way that they’re expecting it to, because things have changed since our parents times.

For example having a job that you can work until you’re 65 and getting a pension, it’s that’s rarer than unicorns. My friends are changing jobs every five years. Within my particular company, they were planning to outsource engineers jobs to places like India where they could get a much cheaper rate like paying them $5 an hour while the company was making 2 billion a year.

And then now it’s like even bigger threats, right? Cause even outsourcing is being replaced with AI. So it’s going to be even cheaper for the companies, but not so great for the employees. And then buying a house. So it’s like the average house is over a million dollars. In Toronto, like who’s going to be able to afford that?

I’m going to be in debt for the rest of my life while not having any job security. And so , trying to follow that blueprint was basically impossible. The game has completely changed and we’re still trying to play the same game using the same rules. And so we just.

Flip [00:18:00] over the game board and decided that we weren’t going to play that game anymore. And what else can we possibly do? What is another way to live that doesn’t involve this following the script? So instead we decided to look into how to invest, like maybe that’s a better way. I actually looked into many different ways.

I was like, how do I build a side hustle to make money? Maybe I could start a company. Is there other things to do? And all of them failed. It was the most reproducible one. Based on our engineering background. We always like things that are reproducible, mathematical and systematic.

The most systematic reproducible one was financial independence via index investing, which is what we ended up doing. And I was so surprised even after looking at the math. Which said oh you should be able to do this within the next five to ten years because we put everything towards this new goal and didn’t go towards home ownership.

We ended up doing in three years and not only that, initially I was thinking of oh, yeah, maybe We’ll travel the world for a year. It’s going to be super expensive. And then we’ll move to a small town in Canada. And then it’ll be like [00:19:00] relatively inexpensive. And that’s how we’re going to retire early.

And what ended up happening was we found that actually traveling and being nomadic Was way cheaper than living in a major metropolitan city, which is another one of those like sacred cows , that we learned about, which is traveling is so expensive. Well, it is if you’re going on vacation and you’re spending like it’s extrapolated to be a hundred thousand a year.

If you’re going on vacation, it costs you like $10, 000 each time you go away for two weeks. But when you’re actually living like a local and traveling to places that are off the beaten path, it’s. Way less expensive. So a lot of surprises came to us along the way in this quit like a millionaire journey that I was not expecting.

And yeah, and that’s one of the reasons why we wrote this book, because after we started the blog an editor came and said, Oh, this information is really useful. And at the time I was like, really? Is it really useful to other people? Okay. If you say so. And so we wanted to get that information out so that people know that the script.

And following the blueprint is not the only way to live. There are [00:20:00] alternative ways of living. You just have to look.

Captain Fi: Yes. I think everyone who is into fire I think you do have to think a little bit differently

Bryce: you really also have to not care what other people think right? I mean the entire time that we were doing this fire journey We were just bombarded with messages from friends well meaning friends family That this was a huge mistake and then we’re going to be, homeless and broke and destitute and none of that came to pass, but it wasn’t easy to do because at the time that we did this was 2015, we were not only just doing the fire thing, which again, only a handful of people had done at that point, but we were also trying to do it by combining it with nomadic travel, which at that time Literally nobody was doing so it did require quite a bit of a leap in faith to do something that, not really anybody had done before, but that attitude of really having the confidence in your own spreadsheets and giving you the confidence to go on your own, go against the grain.

 That’s a big part of the kind of the fire mindset that [00:21:00] I guess confidence and rebelliousness. That’s something that I’ve noticed a lot over and over again and other people who have gone down this path.

Captain Fi: Yeah, definitely. I think as well, having the moral courage to be true to your values because at its core it’s about mindfulness, right? Like it’s about doing what you want. spending lavishly on what you love and cutting away the bullshit, cutting away, societal expectations or useless things. Cause there’s so much crap gets marketed to us. Oh God, this brand new car drive this tank around, like the streets Oh no, I’m happy driving my car.

My old car is fine. I’m going to buy. Good quality clothes. That’s going to last me a decade. I just resold my shoes in Australia here. We’ve got a very popular shoe manufacturer called RM Williams. They do sell expensive other clothes, but they’re mostly well known for their leather work and their shoes.

And yeah, I just resold my [00:22:00] shoes. I think I had new soles. From a cobbler put onto them and they’ve lasted 15 years. They’re awesome. I think if you’re careful and strategic about your purchases and you use your human capital to, to make a great income and you maximize the difference between the income and the savings.

 I feel for a lot of people in Australia, and maybe other parts around the world, like it would be hard not to build wealth .

Kristy: Oh, for sure. I think that you hit the nail on the head. It’s all about cutting out the bullshit because a lot of the things that we get marketed and we get told to do it’s like most of it is ego driven.

 Like for the cars, do you really need a luxury car? No. Does it drive? Does it turn left? Does it turn right without blowing up? Yeah. That’s good enough. You don’t really need it to be a fancy mercedes. You don’t really need it to be Fancy anything because it really is just look at me like this is feeding my ego.

And it also isn’t about deprivation like it’s not about Oh, we’re just going to clip coupons and we’re just going to eat cat food because what [00:23:00] kind of life is that right? It really is about leaning towards your values. If you are a car guy and you love luxury cars, that’s fine.

If you’re spending on that, don’t feel guilty about spending on that. But do you need that and, the luxury vacations and the luxury clothing and handbags and the really big, gigantic mansion. Like you don’t need all of that. Just focus on the things that you actually care about.

And then, Cut out the other bullshit. You don’t need other people’s approval. I think , that, that might be a lot of the FIRE mindset, that’s we’re not desperate for other people’s approval. If you have the confidence in yourself and you know what you value, then it’s much easier to cut out all that bullshit.

Captain Fi: Yeah, it reminds me of those famous words from Paul LePant you can have anything, just not everything. Exactly. Yep. Yeah. I, I think I got into this trap Christy, when I was younger because I don’t know whether it was seeking other people’s approval or like I was seeking my dad’s approval.

It’s like my parents were separated. And so, thinking like, I’ll go into [00:24:00] aviation. , I’ll have this awesome job. I’ll earn lots of money. People will think I’m cool. People will think I’m popular and I’ll feel like a success and people will be proud of me.

And I definitely I’ve had problems with my ego and self esteem and it’s only been since well, since actually hitting fire and retiring from flying going through some deep introspection talking to a counselor and I even like, and some people have varied opinions on this.

I actually did a Psychedelic experience, like a psychedelic meditation. And yeah, it was, wow. What a mind opening experience. And I think I’ve come out of that even more not caring what people think really cool to have an ego dissolution. I think

we’re all still human. Right. But I think, trying to check those emotions definitely has helped me in moving forward.

Kristy: Yeah, that’s actually very brave because a lot of people look externally for happiness, but in reality, happiness and peace comes from, Inner happiness, but it’s really [00:25:00] hard to do that work.

Like when you said you went on a psychedelic retreat It’s not easy. Like it’s not oh fun and everything’s gonna be fine and everything’s gonna be great And i’m just gonna come out i’m gonna be like smiling twice as big No, you have to confront a lot of your demons And it’s terrifying to do that to go through your childhood demons to go through what?

Drives the ego, all these things, but doing that hard work means that it’s lasting happiness, and it’s not just short lived dopamine from buying things or getting other people’s short term approval, because you honestly cannot control what other people think of you, and it changes from day to day, and usually they don’t really care about you, they’re like, thinking about you for two minutes, and then after that, you get their approval, they’re thinking about something else, they’re mostly concerned with themselves.

So having the bravery to be able to face your demons I applaud that. That’s very difficult. And that is actually the true key to inner happiness and long lasting happiness. But unfortunately if you don’t figure out your money, like most people will never be able to have the time and the space to be able to devote to that, to dedicate themselves to that, because when [00:26:00] they’re working, they don’t have the space to be able to do that.

It’s like you are, touching a stove and burning yourself over and over again. If you don’t have the time to heal and you keep touching the stove, then that wound will never go away. It’ll always be there.

Captain Fi: Yeah doing the work is really important. And This might sound random to bring up, but something else that I found to be really helpful along the lines of like self introspection and meditation is I’ve been reading a I guess you’d call it like a sacred text, like a religious text the Tao Te Ching.

 It’s hard to describe, but it’s about the concept of wu wei, which is like flow or like non forcing, non doing, just, being at peace and , the Tao Te Ching talks a lot about the concept of water and how water flows.

So very harmony and tranquil and that has been really cool. And yeah, so I’m not a, a super, like a religious person, but I’ve found it very interesting to to read [00:27:00] about Taoism.

Kristy: That’s actually a really good point one of the things that you could end up getting pulled into is a lot of people who become F. I. are, like, type A people because they’re, like, driven and they need to do all these things and not very chill because they’re trying to get to F. I. But then after F. I. you could still fall under the trap of climbing another treadmill. So for example, because our blog was so successful and then the editor came and gave us this opportunity to write a book, then there was like other opportunities like TV opportunities and then all these other talks and all these things.

So I was signing us up for way more events than we could actually handle, but I wasn’t paying attention because I was like, just saying yes to everything still stuck in that. A type personality mindset and it wasn’t until the pandemic which came and wiped out our entire schedule So every single thing on that schedule got deleted because nobody was doing any events.

It’s the pandemic And then at that point I had to learn how to like you said you have to exist And be happy and be present and just flow like water and not constantly be doing what’s the next thing? What’s the next thing [00:28:00] and that was when I actually learned? The power of meditation, and I think everybody was basically forced into this meditative state during the pandemic, because there was nowhere to go.

There was nothing to do. There was just existing, and you really didn’t have that choice. So it’s like the big reset button for your brain and it wasn’t until I went through this phase that I discovered what true happiness is and true peace is, which means it’s coming internally and not externally.

Bryce: Yeah. I mean, there’s this misconception that especially for people who are just starting off in the fire journey that, you hit fire and then you’re just happy all the time.

And at first it is pretty awesome, but we realized that there’s actually different stages after you hit fire. And I’m sure you can relate to, to, to some of There’s the first part of it, which we like to call decompression where there’s like a, like six week to six months period in which people just go, ah, this is great.

I don’t have to get up on Monday. I can go to the coffee shop whenever I want. I can just binge watch all, eight seasons of friends or however many that they made of that and [00:29:00] or that’s fun for a while And then after that there is this stage of kind of okay What’s next like boredom and restlessness and listlessness and it’s really easy for especially type a people to Jump back into the the next treadmill because they’re like, Oh,

I have all this time now. I’m going to, for us, it was writing. So we really threw ourselves into this writing career because Christy had always wanted to be a writer when she was growing up. So we were like, let’s make a goal of it. And at one point as Christie was alluding to earlier, we had to cut short our time in Norway, I think, because we needed to fly into London.

And so that you could record an audio book for three, four days, four days straight of like just straight recording to, to work on the audio book. And right after the last recording session, we had to rush off to the international premiere of Playing with Fire, which was happening right at that point.

Because you’re doing a Q& A, yeah? Because we had to do like a whole panel thing afterwards. And then after that, we went right into a Speaking at a retreat. Like a speaking engagement in which we were at this retreat for

Captain Fi: A week. [00:30:00] And then

Kristy: we went to the UK to promote

Captain Fi: the

Bryce: book.

And then we went to Ireland to promote the book. We went back to New York to do more promotion. And at one point it was just this doesn’t feel like retirement at all. This is…

Kristy: Yeah, we need to retire from retiring. ,

Bryce: if anything, this is more busy because when we were working, we at least had weekends.

Now, we were just completely book solid. And then there’s the meditative and part in which you realize, Hey, happy doesn’t come from external validation. It has to come from somewhere else. And then there’s this whole inner journey to figure out what that means for you and, the healing of traumas.

That we’re like keeping you on these harmful patterns and all this kind of stuff. But fire, as you may have noticed, fire is just the very beginning part of that journey, right? Because the rest of it is a whole other part of journey of, self realization and self healing and self actualization, all that kind of stuff.

But none of it is possible until you do the fire thing, because otherwise you’re just worried about promotions or not getting fired or, whatever your boss tells you to worry about. , I like to tell people that fire is not the answer to all of your problems, but [00:31:00] fire gives you the time and the space and the mental bandwidth to go and figure out , what happiness means for you.

And that’s the kind of pattern that I’ve seen over and over again from people who have done this fire journey, but it does take years, right? I mean, we’re only figuring this stuff out now, like 10 years after we left, no, what was it, 8 years now?

Kristy: Yeah, I think I think we figured it out.

About the middle of the pandemic, like we didn’t quite realize that there was going to be a whole new journey after fire. Yeah.

Bryce: So like the learning doesn’t stop. It’s just, it gets replaced by something else before you were doing the learning in order to make your boss happy.

 But now you’re doing something to make yourself happy. And that’s a very different journey. But if you never do it, that’s what people. At the end of the life on the death bed going, what did I do all that for?

Right? Because they spent the entire time. They spent 100 percent of their life in that pre fire phase. And they never really

Kristy: actually got to the good stuff. It’s a little bit like a time machine in that way. In that you’re fast forwarding to the end of your life. And then reflecting. And without actually getting old [00:32:00] and dying, you have a time machine that’s jumping forward at the end of your life, looking back and going, okay, what is actually important to me and what do I actually need to fix?

What are my demons and how do I face them? But you’re actually doing that now and you’re not running out of time. So I think that’s the most beneficial part of having the tool of Fi to have that time machine and then ask yourself. When I’m on my deathbed, am I going to have no regrets in this life, or am I going to think, I just lived somebody else’s life, and now it’s too late.


Bryce: Funny because when you’re going up to fire you’re mostly just like staring at, like, all of the map behind it is like spreadsheets. And then after it fire, none of it is captured on spreadsheet, like literally none of it. So it’s like this weird mindset shift that you have to do, which is very discombobulating.

Captain Fi: It is, man. It’s Hey, welcome to the fire movement. Now with free included existential crisis. Exactly. Yep. Exactly. I definitely went through an existential crisis. I was recently talking about this with [00:33:00] a friend of mine and we worked together and he was a bit of a sleeper. He didn’t say anything.

He’s very quiet about it but he was very dutifully stacking away a lot of his income in index funds and he just recently hit the million dollar mark and we were talking about it and he’s yeah, it’s a weird feeling. To not be motivated by money anymore. And he said, it’s like our whole life, our upbringing, our society is raised around getting money and all of a sudden when you become financially independent, it’s well, what do I do?

And yeah, it like forces you to actually think about what. You actually want to do in life. He gave me a copy of a book called Nausea. It’s by an old French philosopher, writer. It’s a really old book, it was really hard to read. But I’m glad I persisted through it.

And it’s it actually Without spoiling it, it actually captures the fire movement perfectly and this existential crisis. And yeah, without giving away too much, I think he actually [00:34:00] goes through a psychedelic experience, which helps him to sort out his mind. Yeah really cool book.

If you’re looking for a horrible weekend, read It really does capture the essence of nausea and it does make you feel quite frustrated when you’re reading the book. I’ve never found a book like that before. Interesting. All the books that I’ve read have usually flowed or they felt good. This one’s really hard to read.

It’s not particularly long. Anyway yeah, so I guess, you do have to overcome. These demons and look, Christie, this is, I guess, a question I want to put to you. I mean, I obviously grew up in a low income household and obviously like luxury compared to what you guys went through in China.

But it certainly left me with an interesting, like money mindset. And I definitely have been working really hard to overcome my scarcity mindset when it comes to, being able to enjoy. My money and to be able to trust and feel secure. And for me, chasing that security, it was like a huge reason I even [00:35:00] got interested in fire in the first place.

So, I mean, Kristy, , your family has an amazing story of overcoming adversity. But geez, 44 cents a day, it really does put things into perspective. Would you be able to talk maybe a little bit to how I guess this shaped your money mindset and then now how you’ve had to, I guess, overcome that to be able to have that abundance mentality and enjoy your money now.

Kristy: Yeah, that’s the operative word is overcome that. So one of the things that people say is don’t have this scarcity mindset, have an abundance mindset. Well, the problem is people who have the scarcity mindset is not something that they asked for. It just came as a result of circumstances beyond their control.

And the thing is, even though it drove me to have security, it drove me to become financially independent. There’s a lot of guilt that comes with after you become FI, you quit your job. You feel like you don’t deserve this, or you’re letting your parents down. And my parents definitely didn’t help in terms of the guilt tripping on that front cause when I [00:36:00] told my mom that we became millionaires, and she was just like, so?

You don’t even have a house. And my dad’s Nope, that’s not enough. So then after we traveled and six months of travel, I get this email from my dad that’s okay, that’s enough fun. You should go back to work now. Here’s a list of jobs that I found for you. So that scarcity mindset sticks with you.

And it’s not just you, it’s. The family members that you feel like you’re letting them down. Cause you’re like, Oh, my parents sacrificed so much. And then I had this good job. And what would people in China give in order to have a job like that? And like, how ungrateful am I? So it’s not even just the like.

Scarcity mindset. It’s like the emotional aspect and the guilt that comes with pulling the trigger and leaving your job when you’re F. I. And it took me a really long time to get to the abundance mindset And I think having done this for nearly 10 years now. I’m finally at the point where it’s oh, okay So maybe like I see when other people don’t think money is the most important thing and they don’t have this desperation That I used to have and see it on the other side of [00:37:00] the tunnel So it’s definitely not something that’s instantaneous, you’re always going to have this guilt that you don’t deserve it, or that you are letting someone down, or that like other people would give their right arm in another third world country in order to have your job.

 But then you also realize that okay, just because you You shouldn’t be hurting yourself and hurting your health to make other people feel better, aka your parents. And what was really interesting about my parents is that initially they were very against this whole idea of quitting my job and becoming a FI, even though my dad’s an engineer and I showed them the math, that did not make any difference whatsoever.

And then the first year they were like, oh no, you need to go back to work. And then second year they’re like, well, the stock market’s doing well, that’s why you’re doing well. And then the third year it’s Wait, you still haven’t run out of money and you’re not asking us for money. That’s weird. And then the fourth year, they’re like, wait, what is this index fund thing?

And then the fifth year, they started following our investment workshop and then telling their friends about it. And then the pandemic hit during the sixth and seventh years. [00:38:00] And my dad’s I am so grateful that you did this financial independence thing, because I’ve known a lot of friends whose kids got laid off.

And this is actually useful for having financial security and you’re clearly doing well, so we don’t have to worry about you anymore. And then that’s when I was able to take a big, deep breath and realize that it’s okay to have the abundance mindset. It’s okay to let go and not have that desperation or guilt.

But it takes years to work on that mindset and finally be able to get out of the scarcity mindset.

Captain Fi: Wow. That’s incredible. Both, I guess in terms of one, I’m so sorry that your family projected their own stress and their own money mindset onto you. But how amazing that, because people often say Oh, don’t tell people what to do, show them the results.

But that’s what you did. You had the moral courage to go your own way and you stuck at it. And eventually You won them over, not that you had to, not that you needed their approval, but it’s wonderful that it worked out.[00:39:00]

Kristy: Yeah, I was not expecting it to work out, and even now I have very strong desire and guilt to defend my parents, to be like, oh, it’s because their childhood was even worse, and they went through famine, and all this stuff, right?

But, again, I had to fight that urge to be… thinking okay, scarcity mindset is harmful if you just keep living that mindset forever. Not everybody needs to be in that mindset. But yeah, it is very difficult when your family doesn’t really understand what you’re going through.

And from their point of view, yeah you have it made like everything, every single problem is minuscule because compared to their problems. It’s really not a problem. Right? So that’s something that you really have to work on in terms of your relationship, in terms of your own mindset, in terms of your childhood.

I had to go through, like, all these childhood write a journal about all my childhood demons and all these things. And I had to talk to my mom about her childhood and help her through a be like a little bit of a, doing some therapy work with her to help her out of it.

And yeah, it takes years. And it takes. a lot of time. So I feel very privileged that we [00:40:00] were able to get to FI and actually have the time to be able to work on it.

Captain Fi: Yeah. It’s incredible. As you guys were saying earlier, like FI or fire is like just the beginning. And once you’ve got to get out of that groove, get out of that track, it frees you up to, to think and yeah, to work, to do this hard work.

And it’s, oh, it’s incredible that you’re able to actually facilitate those kinds of conversations with your parents. Like I wish more than anything I could have those conversations with my parents, especially with my mum and my mum always just said to me like, just make sure you’ve got a little bit more coming in than you have coming out.

 She , had to live paycheck to paycheck just because of the circumstance she was in, but she still, she was able to pay off her house. She was able to build a superannuation balance, which is like a government retirement account that, funded her retirement and she left a, a wonderful gift in an inheritance for all her kids.

Yeah. And, I wonder what that conversation with my mom would be like, because, like her parents, like my grandparents, they grew up through [00:41:00] the war and rationing and I guess their parents through. Another war and the depression. So, even my grandparents, they used to do things like, I remember as a kid, like I’d go to their house and that their cupboard would be full of canned food from 10 years ago, they were just like hoarding.

 Yeah. And even mom, my mom loved doing that as well. And I think I still have a little bit of a habit of doing it. But yeah, it’s funny. I like how behaviors around money and I guess they’re really shaped by our experience. And so it’s really good to be able to, I guess, confront that and ask, well, is this behavior or is this mindset useful?

Is it helping me or is it hindering me? So yeah, fire is just the beginning. Yeah. So, Kristy again, I think, just in general I’m weirded out at how many similar lived experiences we have but I think we might have had a very similar experience when it came to, workplace stress.

I think, Bryce, you said At the start yeah, fire an informal way. It’s like a way to get away from a shitty job. And look, I had [00:42:00] this full on international flying job and , I was taking a lot of extra work and responsibilities and I had family health emergencies going on and I had like my own physical injury which I was going through like rehab for and it was.

pretty clear that I became burning out and with everything going on, it was almost like the universe was screaming at me. It was like the catalyst for me to to retire. And from reading, your blogs and interviews, and it sounds like Christy, you might’ve pushed yourself really a bit hard in your role as a software engineer as well, and maybe experienced a similar thing, reference like burnout.

I guess, could you tell us a about fire and I guess did pursuing fire make it worse? And then when you did fire, did that make it better or what was your

Kristy: experience? Yeah, I totally agree with you that I definitely pushed myself very hard. But then at the same time, I also felt like at the time I didn’t really have a choice because.

There were people’s jobs that were [00:43:00] being outsourced. Like I could have found another job, but there were a lot of other companies that were doing the exact same thing. like when I was in uni, I had gone through multiple terms in which I worked for different companies. And it’s like the same shit, different companies.

 You’re always at the mercy of the company. And even looking at what’s happening now with people who have amazing jobs. From Google, from Facebook, from all the fangs. They thought that their job security was a given. No, you still get laid off. It doesn’t matter. And, I mean, they want to replace you with AI?

They eliminate 10, 000 people just like that. And I, yeah, I felt like at the time I didn’t really have a choice. So, it was either work towards FI and get security, or be at the mercy of the company, regardless of which company you go to. I think that my scarcity mindset was a little extreme in that One thing I would probably change is probably relax about how much money I need in retirement because back then I did not know That nomadicism was an option.

I had I thought having spent five to $10, 000 each time we went on vacation, that’s how much it [00:44:00] costs. And then based on that extrapolation, I thought that traveling the world would cost a hundred thousand, but it actually only ended up costing $40, 000, which was less than how much it costs to live in a major metropolitan city.

So it was, some of the stress was completely unnecessary. Those numbers are per year. Oh yeah. Per year. So some of that stress is completely. Unnecessary and some of it was necessary because you really could get laid off at any point. And I’m glad that we did this before the pandemic. Yeah, so I would say now that I’m much older and seeing what’s happening to my parents, one thing that I’d say is definitely not worth it.

If you’re going to pursue FI is giving up your health in order to pursue FI. That’s totally not worth it. If you absolutely cannot stand that job and it’s destroying your health and you’re like, I’m just going to tough this out for the next. Five to 10 years to get to FI. Don’t do that. Just switch jobs and prioritize your health.

Because as we’ve seen, as we get older, our parents get older. That’s one thing you can never, ever buy back. It’s one of my favorite quotes from Warren Buffett. Can’t buy love. [00:45:00] Can’t buy health. He’s absolutely right. Once your health is gone, you’re never getting that back. So don’t trade that off in order to become financially independent.

If it’s hurting your health get out now.

Captain Fi: Wow. Yeah, , that was a big realization I think that I had as well. I actually haven’t heard that Buffet code. That’s awesome. Can’t buy love, can’t buy health. There you go. Maybe I’m not a. As a diehard of a Buffett fan, fanboy as I thought I was but it’s so true.

And I’m really glad that I twigged eventually. And to be honest, the universe did beat me over the head with a mallet. There were a lot of signs and I should have probably made the switch a lot earlier. And, one of the criticisms that I receive quite a lot is the savings rate.

So I had a a pretty high savings rate similar to you guys. And a lot of people would say, Oh, that’s not sustainable. You’re burning yourself out. But I think. My response is almost identical to what you just said. It’s like, when you’re in that mindset, when you’re in that position, you don’t feel safe, you don’t feel secure.

Yeah. You really don’t feel like you have [00:46:00] another choice. That’s how you’re solving the issue. Right. It’s like Maslow’s hierarchy. So, yeah. I don’t think I would change a thing other than maybe. Switching jobs earlier just as you said, and it’s funny because even now, like I look at my journey and I go, well, holy moly between, like dividend income and investment property and like online business making more money than I know what to do with and, we’ve still got like later on retirement superannuation stuff like but it’s funny because you don’t know what you don’t know. Exactly. Exactly. So you don’t know that, your expense is going to be so much lower. You’re always going to have this additional income later on in life. And something that I found really interesting is the concept of flex rate, which a few people have been talking about recently in that, your ability to save a little bit extra or cut your expenses or even earn a little bit extra.

So , I guess financial independence is so much more achievable than a lot of us think it is because a lot of us freak out when they go, Oh, [00:47:00] I need, 100, 000 a year, the 25, the 4 percent rule, I need two and a half million dollars. Which can sound really unachievable for a lot of people, but yeah, when as you and Bryce found out, well, maybe you don’t need a hundred thousand dollars.

Maybe you could have a part time job. So yeah definitely food for thought.

Kristy: Yeah. One of the things I want to mention is another thing people don’t think about is every dollar that you earn. After financial independence is worth so much more than the money that you earned before.

And the reason for that is because of tax optimization. The investment income is more tax efficient than earned income. But another aspect of it is when you’re actually trying to live off your salary, you need to pay for your housing expenses. You need to pay for transportation.

You need to pay for food and you need to save. After FI all those things are being taken care of by your portfolio by the yield by the capital gains So any money that you make afterwards you don’t even have to put it into savings It’s just free money for you to do whatever you want with [00:48:00] So even if you earn as little as let’s say you earn a thousand dollars a month after retirement Like to most people that would be like a thousand dollars a month.

That’s like nothing. That’s like less than minimum wage What are you going to do with that? And yeah, if you’re trying to live off of that and you’re trying to save that’s nothing but after your fi A thousand dollars a month is a lot of money that gives you all these other options for like additional just fun money, expenses, it gives you extra security, it gives you money for like unexpected expenses, so people shouldn’t treat money after FI the same as money.

Before FI, because there’s a multiplier effect that makes the, like any amount of money that you earn after FI just multiplies and ends up being so much more money than if you’re trying to actually live off of that

Captain Fi: money. Yeah, and so one of the other funny things is, craving a bit more structure and social interactions.

I’ve been doing a little bit of volunteering post fire. And it’s great because, you get to have social interactions, get to do something fun. I [00:49:00] love gardening. And so the obvious choice is like community gardens. And I think maybe I could have retired earlier and just worked in like a nursery or something one day.

Yeah. Yeah. There’s this awesome concept of barista fire, which I’ve been reading about recently, and I’ll do up a blog article about it, but yeah, super powerful money, as you say, money earned post fire is it’s all for fun. Now speaking of money. This wouldn’t be the financial independence podcast if I didn’t try and delve into Kristy here and Bryce’s money side of the house.

So I’d love to, to ask a few more questions about, , your personal finances, if that’s okay. Yeah, awesome. So I guess this is like a two pronged question. The delineation being, between before fire and post fire. But I’d love to know what kind of income you guys have. So what did you have before fire?

And then now what are you using after retirement?

Bryce: Okay. So before fire, we were both working in engineering jobs. I [00:50:00] started off making. Let’s see about $80, 000 Canadian and this is back in 2006 or something like that and Christy was making around 60, 70, 60, 70, something like that. And over time that amount, went up because of the raises and promotions, this kind of stuff near the end of our fire journey, we were earning.

Kristy: So after taxes, it was like 170, so quite a lot, yeah. Right. Our last year, yeah. So we,

Bryce: When we hit FI, it was because we were spending$ 40, 000 a year for living expenses, so via the 4 percent rule, like you alluded to, that’s a million dollar portfolio amount, so that’s why we named the book Quit like, A Millionaire.

So when we ended, we had a portfolio of 1 million and we left and traveled the world and we never intended to make any money after that. Then after about a year, after a year or two of traveling around nomadically and then, visiting Europe and Southeast Asia and doing the backpacking thing.

Because we’re obnoxious millennials we started trying to go, Hey, maybe we’ll make a goal of this whole writing thing. [00:51:00] And that ended up becoming a lot more successful than I thought it was. Because everyone that I talked to in the writing industry is you can’t make a living off of this. But

Kristy: we also tried to write children’s books while we were working at software engineers.

And it’s you’re not really making any money. Don’t try to go into writing if you want to make money.

Bryce: Yeah, I think our first book, which was called Little Miss Evil, was a children’s book about a girl who could shoot fire from her hands and she was like a supervillain. That made $5, 000, like total over its lifetime kind of thing.

And that’s above par for the course for the writing industry. So anyone out there listening going, I’m going to be the next Stephanie Meyer and I’m going to write a book and become rich. That’s not how it works at all. Everyone in the writing industry has it.

Everyone in the writing industry, who is not FI, basically needs another job to to make it unless you’re like, Tom Clancy. Very small percentage, but because we wanted to keep the experiment somewhat pure, we left the portfolio that we saved up from before FIRE in one kind of set of investment accounts.

And then everything after that we earned in it, we put into its other separate investment accounts. We call the [00:52:00] first portfolio, Portfolio A, and then the second portfolio, which is all the money that we earned after FIRE. To be portfolio B because we didn’t want to mix the money together.

 Because that would make it difficult to see how well your portfolio is doing, whether this whole FIRE thing even works and like all this kind of stuff. So, as of right now, our portfolio A, the first portfolio was started off at a million. And despite the fact that we’ve been living off of it, it has now gone off to one point, I think three or so.

Around three or four. Yeah. Around three or four. And then portfolio B is sitting at almost half a million so we’re looking at our total net worth of 1. 8, 1. 9 million dollars in total. But 1. 3 of that came from before FIRE and then about half a million came from after FIRE. And this is, Six, seven years of like blogging, book writing touring, and then doing all that kind of other

Kristy: stuff.

And a lot of that is investment gains. So that’s another thing that it’s like the second portfolio, because we’re living off the first portfolio and withdrawing 4 percent each year, the second portfolio, we don’t withdraw anything. We just keep. putting it back in and reinvesting. So that’s like [00:53:00] another reason why it’s grown.

We didn’t actually earn that much just from writing. A lot of it was investment gains as well because you’re actually not withdrawing any of it for living expenses. It’s all coming from

Captain Fi: the first one. Yeah, that’s awesome guys. First of all, congratulations. That is super inspirational.

I love the concept of the portfolio A and the portfolio B. That’s really cool. It’s awesome to see portfolio A, not only keeping up with, but like outpacing inflation, covering your cost of living. And now, you’ve been able to build this passion project, which arguably is not actually about you.

It’s about helping other people. And that’s really cool that. In, it reminds me of that Zig Ziglar quote, you can get anything you want as long as you help other people. And you guys are basically like a part time job, part time business, helping people reaching fire and understanding like what they actually want out of life.

It’s really cool that you’re building up that portfolio B. Hey, you never know. You might be able to buy a house with Portfolio B [00:54:00] and and Christy, your dad will be just over the moon.

Kristy: I finally got through to her by nagging her for 10 years.

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Then it can be viewed potentially millions of times and easily updated by my editors over the years to remain [00:55:00] relevant. If you want to learn more about this lucrative side hustle and retraining for the Digital Workforce revolution, then check out my article about making money online and read my review of the E-Business Institute and their online self-paced courses.

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Bryce: So,

Captain Fi: You mentioned that your living expenses were around the $40, [00:56:00] 000 mark post fire.

How has that shaped up over the last 10 years?

Kristy: So surprisingly we adjusted for inflation and inflation didn’t really affect us. Part of the reason is because we were nomadic. So what happens is you’re using the power of. Geographic arbitrage, which is the idea that we’re spending like a strong currency Canadian and US dollars in a place with weak currency so we’ve been to places like Portugal and Poland Southeast Asia like all those places.

The currency is quite weak. So you get a really good return on your money and Also, because the dividends have been going up over time, so we haven’t really noticed even with the inflationary environment of today, it hasn’t really been a big problem because the portfolio grows with inflation and dividends have been raised.

So, I’ve also noticed, just comparing with, just out of curiosity, I compare with other early retirees. Like this other couple that we met while we were in Iceland, they’re called where we be. So Robin and Rob, they also wrote a book on early retirement and just looking at their numbers, like how [00:57:00] similar it is.

’cause I think their timing was they were all like worse in terms of luck. In, in quitting because I think they quit like right after around great financial crisis like 2008, right? And they posted their numbers from 10 years and we’re actually very like almost identical in that like they left with a little under a million We left with a million they were withdrawing from that portfolio.

We were withdrawing from our portfolio a and then each year they spent about 35, 000 us dollars. We spend the equivalent about 30, 000 us dollars and over time it hasn’t really increased that much. And then 10 years later, their portfolio is around 1. 3. Our portfolio is around 1. 3 and right now our expenses have gone up a little bit due to inflation, but it’s like hovering between like 42, 000 to 45, 000 somewhere around there. So. Yeah, I think geographic arbitrage is actually very powerful in terms of helping you control your costs, even when inflation is not something that’s within your control.

And another thing is that people forget that your dividends [00:58:00] also get raised because companies are charging more as a result of inflation. But as a investor, that money gets passed to you, whereas As an employee, you get screwed because you either get laid off or, they refuse to raise your salary to hedge for inflation.

So yeah, overall the expenses haven’t really gone up that much, even though we’ve been retired for almost 10 years.

Captain Fi: That is really cool. And yeah, I just want to reiterate what you just said, Kristy, like that is actually such a powerful concept is that basically consumers and workers ultimately get screwed.

And even in Australia, we have this thing like GST, and , if you consume, you’ll pay the goods and services tax. It’d be like a business like a company, you basically can write that off. You get like GST refunds and there’s so many incentives around longterm investing and business ownership and creating.

I guess creating wealth and creating economic growth that, as a business owner and as a investor[00:59:00] it doesn’t really hit you as hard as if you’re like the end consumer. And yeah, increasing dividends are awesome. Like I just got paid out. It was like maybe six or $7, 000 in dividends dropped into my account the other day.

Awesome. It’s awesome. And every time they’re getting bigger and yeah, it’s like a snowball effect, isn’t it? Oh yeah, for sure.

Kristy: I didn’t realize this concept of how much better it is to be an investor versus an employee until I actually quit my job.

Cause at the time I was like, I will put 100 percent of my effort into this and then they’re going to give me raises and I’m going to climb the corporate ladder. But. In reality, the more effort you put in, they just give you peanuts. It’s as soon as you get a promotion, it’s okay, well tell me what you’re going to do to get the next promotion.

Whereas here, I just sit on my ass sleep and then the dividends just increased. I just make money in my sleep. So it’s not obvious until you actually become an investor and no longer an employee.

Captain Fi: I tell people I don’t have time for a job now. I

Kristy: love

Captain Fi: it. I don’t I enjoy reading, gardening, spending time with my puppy dog training.[01:00:00]

honestly don’t, I don’t have time for a job. Do you know what the funny thing is guys? Is it, I think my expense is very similar to yours. I know yeah. So like an Australian dollar is not worth as much as a Canadian dollar. Yeah. It’s

Pretty close though. Yeah. So I think I’m spending around my baseline quote unquote is around 30 to $32, 000 and then I add whatever I spend on travel and typically spending around 10 or 15, 000 on travel.

So, around 40 to 47, 000 a year. I think last year was like 40. 42. And then this year we’re on track to be about 40. But we haven’t really spent a lot in the first half of this year. So we’re probably looking at doing some more international travel in the second half, but it’s funny how post fire like expenses, similar investment portfolios similar size yeah, I guess there’s no need to reinvent the wheel.

We just need to look at pioneers. Like yourself, you’ve gone before me and get all the good gouge, get all the information.

Kristy: Yeah. That’s why we love fire. Cause it’s reproducible and [01:01:00] systematic. It doesn’t require you to Oh, but you know, if you have this business idea, but somebody else took that business idea, now you can’t do it.

Now it’s going to be a totally different path. It depends on your personality. It depends on the market. Depends on this, depend on that. It’s just systematic. Mathematical and reproducible

Captain Fi: science. Yes,

So do you guys keep an emergency fund of cash? Like, how much do you choose to keep on the side or are you like totally invested?

Bryce: So our cash management strategy it’s simple because we like to keep everything simple. So basically what we do is over the course of the year, we let the dividends build up and then we might shovel the dividends into a money market fund, just so that it makes a little bit of interest.

Then at the end of the year, we then take all the dividends and we harvest them and and we stick. Basically the next year’s living expenses and harvest it all at once and stick it into a checking account. So , if our living expenses we projected, or we budgeted to be 40, 000, we remove 40, 000 of the portfolio on December 31st and then put it , into a checking account or a high interest savings [01:02:00] account.

And over the course of the year, we just spend that down over time. And that kind of acts like an emergency fund as well. Anything unexpected comes up there, we have 40 grand of cash. Out of the portfolio at the time we’re not doing anything like every month taking a little bit from the portfolio or anything like that, as dividends come in at different rates and at different times over the year, depending on what the dividend schedules are, the, of the particular ETFs that you chose.

So that quickly becomes unwieldy. So we basically had this like rolling window of one year’s worth of cash that we keep in cash and everything else is invested.

Captain Fi: Oh yeah, I love it. Cause I wasn’t sure at the start how you’re explaining that, but basically. To sum up, so you basically have a year’s worth or maybe more than a year’s worth of living expenses because you’ve got the dividends building up in the money market account and then you’re pushing it across into your spending account or your like high interest savings account.

That sounds like a good system.

Bryce: It’s I describe it as we as harvest time comes. So we harvest all the oranges and then we eat the oranges over the rest of the year. And then [01:03:00] by the time the oranges are gone, then there’s a new crop of oranges that just grew.

Kristy: Yeah. You don’t cut down the tree. You eat the orange because they treated the

Captain Fi: portfolio. Yes. But also , it’s not like December comes around. You’ve only got like 10 oranges left because you’ve still got the dividends that have been building up throughout the year in that previous account that you just haven’t moved into the spending account yet.

Yeah. Right. Cool. . I love it.

Kristy: It’s a forward projecting thing.

Bryce: That way, if you absolutely need to I just, I busted my car up or something like that, you can borrow the money from your next years of dividends and then make it up later with other income sources, or maybe even like selling, finding an opportunity to sell some ETF units if you absolutely need to.

But there’s always cash somewhere in the account, but the vast majority of it is invested except for what we need for the upcoming year.

Captain Fi: Yeah. Nice. Look, I was very similar. I on like my accumulation phase, like I was notoriously bad at keeping money. I’d run out of cash once I got down to my last a hundred bucks.

Like seriously, I was like, what the hell I need to upper cut [01:04:00] myself. And after FI, I’m definitely keeping a lot more money. Started out around one year and I’m actually hovering closer to two, two and a half because I’m building up cash to buy a hobby farm. That’s the goal.

And I definitely feel like a lot more secure with keeping that cash buffer. And I think it’s a perfect segue into the next question, which is about insurance. So Obviously having a cash emergency fund and having a large portfolio of like liquid assets is like a awesome way to self insure, right?

Because I mean, you’ve got access to nearly 2 million worth of liquid assets should something happen. But obviously the goal isn’t to use it all, so I’m interested to hear about any kind of personal insurances that you use to, I guess, mitigate risks or pass off the risk to the insurer and how this has changed pre retirement to post retirement.

Bryce: Yeah, so I mean like most of the time the insurance that the insurable costs that you have to mitigate as health insurance and [01:05:00] if you own a car or a house, the regular car and house insurance, but generally for those things you’re required by law to have them in some form or another anyway, life insurance but for people who have kids for life insurance That one is something that only really makes sense before FI, because what life insurance is supposed to do is, if the breadwinner dies, and how do we make sure that the family is taken care of once that income source is gone?

But once you’re FI, your income source is taken care of, it’s passive, it’s not linked to any active employment. So you don’t need any life insurance, because if you die, your spouse and your family simply just gets the same amount of money and the same amount of dividends as before. So when we were working, there were some periods of time in which we had, critical illness insurance, or we were looking into life insurance, but it only really made sense because we had this plan to to go after FI and we knew that eventually we wouldn’t need insurance before we what you do there is you only buy enough term insurance that gets you to to the point [01:06:00] in time where you think you’re going to hit FI.

Right. And you only buy enough to if something were to happen to you, that how much that you have, plus the amount that you would get if the insurance policy were to get triggered, like by your untimely death, to make sure that those two amounts added together, get you to your FI number.

So to put it into concrete numbers, if you were saving towards FI and you were pretty far away, you only had a hundred thousand dollars. You need to buy enough term insurance to get to pay out 900, 000 if something were to happen to you, but as you get closer and closer to your FI target, you need less and less insurance.

So you can keep dropping your insurance coverage. So like later on, if you have half a million dollars, you only need enough for the insurance to pay you half a million and then so on and so forth. So that by the time you get to FI, you naturally just let the insurance expire and then you’re just self insured.

Captain Fi: Yeah, I love it. It’s like you can optimize the journey. I know when I was working I personally never had comprehensive car insurance because I never drove a brand new expensive car and I always had enough money to replace one, but I’ve always had [01:07:00] third party personnel liability for accidents.

You obviously have like like income protection, like a TPD all of those kind of income protection. But yeah, as I’m like now on the other side, I’m looking, I’m like, well, I don’t really need life insurance and I don’t really need income protection insurance. So, it’s a cool thing that kind of, as you progress towards fire, your expenses for these things drop making your savings rate even higher.

Bryce: The name of the game in the insurance world is just try to sell as much insurance to each person as possible. But if you can quantify exactly how much coverage you need then that allows you to buy exactly how much that you need and not overinsure yourself. The only insurance that you absolutely can’t, like if you have a target for FI, you can figure out how much insurance coverage you need.

 If by making some choices for what car that you drive, you can figure out how much car and like car coverage that you need. The only insurance that you really can’t take for granted is health insurance because, you really can’t tell what you’re going to get sick with and when, right?

So, but you know, you’re an Australian we’re [01:08:00] Canadian. We have socialized healthcare and I know yours is like a hybrid public private model. And for the Americans, that question is a lot more complicated because they, are just basically on their own. But health insurance is really the only insurance that you need to keep afterwards.

Because, again, no one knows when they’re going to get sick. Everything else after that, you can just, you can price out and calculate exactly how much coverage you need. And then pick the cheapest policy that gets you what

Captain Fi: you need for that. I

Kristy: just want to put a caveat for the health insurance thing.

This is something that we learned as we went. So , even though we have this socialized healthcare and health insurance in Canada when we left the country, when we became nomadic, we actually lost that insurance. So we had to self insure. So that was the only insurance that we paid for for those six years of travel before the pandemic.

And so here’s the thing that we had to learn as we go, which is. Travel insurance and expat insurance are very different in that travel insurance assumes that you already have coverage back home and it’s to pay for you know the hospital stay and maybe the helicopter ride to get you [01:09:00] repatriated back to your country So that their insurance can take over for whatever illness you have or what kind of injury you have So it’s not as comprehensive but and it’s less expensive, but you have to have insurance back home versus expat insurance just covers you like for example for new immigrants or people who are expats When you don’t have any insurance whatsoever In another country and they need to cover you the entire time.

So we actually had to get expat insurance It depends on your age. It depends on the deductible that you want and the coverage and it wasn’t actually as expensive as we expected it to be. We used IM global, which is an international insurance company, and I think it was around. Like a hundred and fifty US dollars to two hundred to cover the two of us and I think the coverage was per month and the coverage was five hundred thousand each I believe.

I believe it was a million. A million. Okay, a million each. And, compared to how much money we would have had to spend staying home versus traveling, it was still worth it because the extra cost of the insurance was way lower than how much money we [01:10:00] ended up saving by being nomadic because everything else was cheaper.

So that was the only insurance that we basically paid out of pocket is the expat

Captain Fi: insurance. Nice. And obviously just a caveat as well. If you’re listening to this don’t just run out and cancel all your insurance. It’s important that you look at your situation objectively and what you actually need for your personal circumstance.

And this is where something , like a financial advisor or like an insurance broker, it could be worth having a chat to them, but obviously just be aware The goal of the industry is to sell you a lot of insurance that it might not necessarily be in your interest, but it’s worth listening to both sides of the argument before you make a choice for yourself.

So, I know you guys famously had a pretty high savings rate but I’d like to ask was that deliberate target? And how did that evolve over time?

Kristy: I initially was trying to get my savings up as high as possible to save for a house. Cause that’s what everybody was doing. All my coworkers were saving for a house. Toronto was very expensive. So I was trying to aim towards 30 [01:11:00] to 50 percent savings rate. Once I discovered fire that skyrocketed to at one point. 78 percent savings rate. Just because I had this very clear goal in mind that I was driving towards and it was like in the immediate future, less than. 10 years. And also I was getting more and more nervous about my job. So that actually drove my savings rate way up. And then there were times, like for example, the last year before we retired, I didn’t even bother taking vacation because I figured, well, the rest of my life is going to be a vacation.

So why just. tough it out for one year. Don’t worry about it. So I think a lot of that was driven by fear, actually fear and scarcity mindset. So may not have been like mentally healthy, but that got me to where I am. So I guess I have no regrets.

Captain Fi: Yeah. And how about you Bryce, did you have a opinion on as a savings rate or were you working towards a particular figure? I

Bryce: was working towards a down payment for a house and at a certain point we Canada is right now one of the most expensive real estate markets in the [01:12:00] world and it was back then too.

, it just kept getting worse. So, at a certain point, we had saved up our down payment fund of about half a million dollars, which is a pretty big down payment. We hadn’t pulled the trigger yet because we couldn’t find a house that was a good deal. And at one point we looked at this, fairly large sack of money that we had accumulated and we went, Oh, gee, we, can we do something different with this?

And we realized that by running some of the, we had discovered Mr. Money Mustache and JL Collins and some of these wonderful FI bloggers That inspired us and we’ve now become, personal friends with that if we, once I learned how the math worked, I realized that if you could take this money and invest it instead, we could potentially either go into debt and then buy that house, go into debt, and then try to dig out of it for the next 25 years, or we could potentially be retired within, five years.

And I told this to Christie, I showed her the math and it was a pretty much a no brainer. It’s okay, yeah, let’s redirect this money towards the fire thing. And and once we had that goal, we power saved towards it. But even before then we were power saving towards an.

Related, but different [01:13:00] goal, right? So we were always power saving towards a goal, but that goal changed. And it was lucky that goal changed before we actually end up spending that money. Because if we had done that would make our journey a

Captain Fi: lot longer. Yeah, of course. I mean, I think Kristy mentioned after you changed priorities because you had.

Already such a big nest egg to start with only taking three years from, I guess, switching into index funds to reaching fire. That’s pretty impressive. And I guess that leads me to one of my penultimate questions here, which is one of the main things I guess we, we talk about Which sometimes I think distracts us because as it turns out, investing is obviously just a very small portion of fire.

The majority being obviously the behavior and the mindset, but still investing is an important part of it. So what do you guys invest in and why?

Bryce: Well, like you mentioned index funds. So, the specific index funds that we invested in as the Canadian stock market, the American stock market tracked by the [01:14:00] S and P 500 and the international market, which basically is like the rest of the world’s market, which Tracked by the EFI index, E A F E, which stands for Europe, Australasia, and the Far East.

So it actually tracks like the Japanese, the European markets, the Australian markets, and all that kind of stuff in one giant index fund. And then after that, there’s usually like a bond fund that is attached to that. But but yeah, it’s actually pretty simple. It’s right now, it’s just four funds.

The funds are. One is called ZCN, which is tracks the TSX. The others are American funds. One is the Vanguard total index, total stock market index fund tracked by BTI. And the EFI one, I believe the ticker symbol is IEFA. And right now, because of interest rates are going up, my bond portion is usually in like a, an aggregate bond index fund.

Right now, it’s in a preferred share index fund. And the reason for that is because preferred shares pay a much higher dividend. We want more yield now that we’re retired. And also, preferred [01:15:00] shares because of the way they’re structured in Canada, tend to They float with prevailing interest rates.

So as interest rates go up, the the dividends reset up as interest rates float up. So right now we’re riding , that curve as interest rates are increasing all around the world. So that’s where our portfolio is at right now. And both Portfolio A and Portfolio B are invested in exactly the same way.

Captain Fi: Wow, that’s interesting. So, okay, I haven’t heard of the term. , preferred share. , is that a fixed interest security similar to a bond?

Bryce: Preferred shares are a hybrid between a bond and a stock, the dividends that, okay, , I have no idea what the equivalent is in Australia, but in Canada, in the U. S. A preferred share, they pay a fixed dividend rate, but the dividend rate Is based off of a spread off of the five year bond of the five year bond Yield that you get on the bond market. So when the five year bond yield and goes up, then your dividend goes up, and when it goes down, then your dividend goes down.

So it’s a floating rate . So a preferred share will be fixed for five years, but then as it resets based on prevailing interest rates. So it floats up or down [01:16:00] gradually with interest rates. And we are.

Using a, an ETF that tracks a whole bunch of them. So there’s always 20 percent of the portfolio that’s getting reset. And then that’s getting set to a higher interest rate because now interest rates are a lot higher. Yeah. Do you guys have anything like that in Australia?

Captain Fi: I actually don’t have bonds. I’m okay. Pretty much all invested. And then I maintain, I guess a higher cash position. Uhhuh, for my, I guess my stability. But yeah, there are like bonds here so you can get a bond, e t F you can also invest in fixed term.

Deposits. And there’s also like money market ETFs, which I guess they’re like similar things or similar ways of achieving like that kind of fixed interest. Yeah, but it sounds like the preferred shares ETF. It sounds very similar to a bond fund. I think you may have to do some reading when we get off the call.

It’s quite interesting. Yeah,

Kristy: from a risk spectrum, it’s actually less risky than stocks, but more risky than

Bryce: bonds, right? Because if a company runs into trouble and has to cut a [01:17:00] dividend, they’re by law required to cut the dividends off of their common shares first.

Then cut dividends on their preferred shares, then default on their bonds. So they have to do it in this order. So a preferred share has preferred, I guess, ranking in the order of which funds or which security is considered to be more secure. So it’s it’s less likely to be cut than common shares, but it’s more likely to be cut than bonds.

But the companies that we use it in that we invest in for these preferred shares are mostly big banks, financial companies, blue chip companies. So the odds of those running into drastic dividend cuts are really quite low.

Captain Fi: Interesting. Hey, look, I’m just going to read this straight off of the Australian investors association.

Okay. And cause we do have it. Here in Australia, they might be different to Canada, but here in Australia, so the AIA says preference shares are generally superior to an ordinary share in some way, usually because they have first [01:18:00] preference to right or right to a dividend preference shares generally don’t have voting rights and some preference shares are convertible that is they can be converted to Thank you.

ordinary shares at some stage in the future. And good old Google says that preference shares are sometimes known as convertibles or hybrids in Australia because they have characteristics of both equity and debt. So there you go. I have heard of the term hybrid before, and I know they’re big in like the superannuation industry, which like the retirement industry here in Australia.

And I guess it’s probably because fund managers are doing exactly what you’re doing and you’re just playing off like your risk versus your income. So yeah, I think , you summarize it really well, Bryce, when you said it’s provides a bit more income, but it’s a bit more riskier than bonds.

Bryce: Yeah, because bonds will generally have this anti correlated effect with equities when equities when stocks go up, bonds go down, when stocks go down, bonds go up. Preferred shares will tend to move in the same direction as stocks, but just in, in a less intense way, right?

[01:19:00] So, because they are considered shares so the fortunes of a company make, if the fortune of the company goes up or down, it makes the share more or less attractive. But it’s, it’s less, so it doesn’t have that same portfolio balancing effect that a bond would have. But if you’re okay with accepting a higher volatility, like we are because our portfolio is the size that it is then it can be a way of getting a much higher yield, like a predictable yield bonds, like for just to give some numbers onto it in in Canada, the, like a bond aggregate fund will be paying maybe like three, three and a half percent.

But a preferred share index can pay like right now they’re paying like six. So you know and because those are classified as dividends rather than interest, they’re taxed much more efficiently as well because dividends in Canada are taxed at a much lower rate than the interest, which is a tax, which is taxes, ordinary income.

So, yeah, what you described is exactly what we described it. All the rules of your preference shares are described the [01:20:00] same way as our preferred shares. I guess you guys just use a different term, but you know, we’re both commonwealth countries. So I guess we all just steal all of our ideas off of Britain.

So, that’s probably why they’re the same.

Captain Fi: Well, I think I need to do some reading on this when I get off the call. Cause Hey, that might be a. An interesting way to juice the portfolio. It’s been cool to chat to certain people and see how they do this. I remember talking to Lacey Filipich and she’s a financial educator here in Australia, and she talks about her mom, Fran used to, I think she used to do a little bit of lending her shares out.

I forget what that’s called, like doing options trading but being the person that was like lending out the shares and she was able to get more income that way as well. So there’s definitely a few little. Tips and tricks that people want to do some further reading , to potentially, take on a little bit more risk and get a bit more return.

Bryce: I believe Interactive Brokers has some kind of program for that kind of thing. Interactive Brokers is a US based brokerage, they’re like a huge global brokerage firm that accepts clients from like all over the world, including Australia, Canada Saudi Arabia, and like all these countries that can invest in [01:21:00] that kind of thing.

And there’s this little checkbox that you can turn on in which they will Lend out , your shares to other people that are like either, I think shorting stocks or something like that, I don’t actually do any kind of like active trading, but you know, when you short a stock, you’re like borrowing it from somebody and then trying to buy it back at a lower price.

So when you borrow it, you’re borrowing it from other shareholders and interactive brokers allows. Like you to get you on your portfolio by lending out your shares to other people. So that’s another thing that I’m aware of. I haven’t tried it yet because my brokerage that I use doesn’t support it.

But that’s also been a really interesting idea that I haven’t really dug into very much.

Captain Fi: well, it’s something for me to look into as well, because, I generally do have full faith that, the market will go up, but I know that one of the reasons why I’m not personally heavily leveraged is because, I do know that it goes down from time to time and certainly, like leverage and options trading can definitely increase your wealth.

I mean, I’ve no doubt that some people are able to do it [01:22:00] effectively, but I think the majority of people get burnt. And so that’s why I’ve avoided it. But look I guess back to your investments reference your preferred shares and your regular index funds.

Do you have a target asset allocation that you choose between those and why?

Bryce: Sure. So right now it’s real simple. We call it the pizza pie portfolio, which is 25 25 25 25. So everything’s 25%. So you put on a pie chart, it looks like a pizza pie that just slicing across.

Captain Fi: Hey, those are healthy slices if they’re a quarter of a pizza, that’s my kind of pizza.

Bryce: Yeah. Those are the kinds of pizza slice you have to fold up to stuff into your mouth.

Captain Fi: So that’s 75 percent

Bryce: index funds. Yeah. Equities and then 25 percent preferreds, but because preferreds sort of act like equities rather than are closer to equities and bonds, the portfolio behaves more like a 90 percent equity, 10 percent bond portfolio rather than a 75 percent equity, 25%.

Bond portfolio. So it’s a fairly aggressive allocation. And the reason why we’re comfortable with doing that is because. The dividend yield that we’re getting off our portfolio is more than enough [01:23:00] to cover our living expenses. So we really don’t care about

Kristy: volatility. I just want to mention when we first left, we were a lot more cautious, so we were more like 60 percent equities and 40 percent bonds, right?

But what happened over time was As we got more comfortable with our expenses being very stable and being able to use geographic arbitrage to control inflation we became more aggressive in our allocation so that now we’re at a level that we like to call dividend fire, which means the yield from the portfolio.

So the interest, the dividends all added up together, cover all our expenses without us having to sell anything. So that. Allows us to have a more aggressive allocation because we don’t have to ever worry about selling anything and the it gives us that peace of mind to be able to sleep at night, no matter what happens with the market.

Bryce: The nice thing about dividend fire, because the 4 percent rule off of that the fire community is based off of is assuming that you take some money from dividends and you sell some stocks, right? In order to fund your living expenses, but if you rely on capital gains.

To [01:24:00] that you need to sell something every year by nature, you’re at some point going to be selling when things are down. And that is when it’s possible for you to get into this problem called sequence of return risk, which is if you retire and then all of a sudden there’s a market downturn.

You’re forced to sell the first couple of years where everything’s down. but then when the stock market is inevitably rebound, , you sold off your, the trees of your orchard and there’s not enough and then you can’t recover as well. So when you’re dividend fire, you really are just harvesting the oranges and you don’t need to cut any trees.

And when that happens, you honestly really just don’t care about what the stock market does day to day. And it takes a lot of stress out of it. So that’s like our special kind of personal take on fire where we want it to be. Even more cautious than the 4 percent rule.

Like our dividend yield or our portfolio is three and a half percent. So we’re actually like a three and a half percent rule kind of thing, but it doesn’t really roll off the tongue very

Captain Fi: easily. Right. no, that makes sense. And I know I guess I’m lucky because Australian shares typically produce quite high dividends.

 I was looking at my portfolio recently and it’s I read it’s like [01:25:00] 5. 9 percent dividends. Whoa, that’s a lot. Yeah, but obviously now I’m actually because I started out just buying Australian shares because I wanted that baseline level of passive income. And after I had secured that I started investing quite heavily overseas.

And so I’ve got like a 75 percent allocation to international shares. So it’s 50 percent U. S., 25 percent global ex U. S. and then 25 percent Australian. So. Now my overall dividend is like a lot lower because I’ve seen the US and international companies tend to retain their dividends for like R and D and they focus a bit more on capital growth, which is great because it’s like tax effective.

But it’s interesting to see that by using hybrids, you’re able to. Increase your portfolio dividend or I guess, engineer it to take high dividends. So you don’t actually have to sell any shares, which is really cool. And

Kristy: it actually makes perfect sense that you’re not just investing in the Australian market, just like we’re [01:26:00] not investing in just the Canadian stock market.

Cause we want to avoid something called a home country bias in which people just invest in what they know. They’re like, okay, well, my country, that’s what I know. So I’m only going to invest in Canada or like the UK or Australia. And it’s actually a really big mistake in terms of diversification.

Cause in terms of the world. Economy, Canada and Australia’s stock markets are tiny and dwarfed by Europe and the States. So, it actually makes perfect sense for you to diversify in order to even though you’re giving up the yield, you’re actually more safe in terms of your diversifying that the risks away from just your home

Bryce: country.

Yeah, we had a reader at one point that was from like Denmark and was asking us whether it was a good idea to invest completely inside of the Danish index. And I’m just like, I looked into it and it’s basically mersk, the shipping giant and a chocolate company.

And that was a great,

Captain Fi: I’ve seen that logo painted on shipping crates all over Adelaide. So maybe that would be a globally diversified company.

Bryce: That’s [01:27:00] true. But it’s only one company, right? The Denmark economy is based off of their, I guess, Viking roots of sailing around the world and eating chocolate, I guess.

I don’t know.

Captain Fi: That’s funny. What else comes from Denmark? Was it, wasn’t it tulip mania? Was that Denmark or am I mixing up my European countries? That is Netherlands. Oh, the Netherlands.

Bryce: Lego. Lego has come from there, a friend of ours named Alan he just loves Lego. He just keeps reminding us that, but Lego is actually one of the large, as he tells me endlessly is the, one of the biggest private companies in Europe because they never went IPO.

 So even the Danish index does not include Lego, unfortunately, which is,

Captain Fi: Killing on marbles.

Kristy: Yeah. Marbles

Captain Fi: killing it. Yeah. Gosh. Well, it’s definitely a really interesting conversation. I’ve heard both sides of the story as well. We’ve got a very famous investor and say economist either way very smart with money.

And he’s published a couple of books which is a Peter Thornhill and his approach is a bit different. So he [01:28:00] invests in, I guess what he calls like a modified industrial index in that, he likes companies that produce things and he invests in big Australian companies that have like global contracts.

And so, he’s been able to very successfully build a large portfolio and gosh, I think it was maybe half a million in passive dividend income just by investing in these like giant Australian industrial companies. So I think. Oh, and I could be mis quoting here, but I think he wasn’t like really big on finance, so I don’t think he’s like super into banks and stuff, but I would have to just double check that.

Maybe someone can fact check me. And yeah, his theory was that, like by investing in companies like, CSL or even some of the big mining companies which have international Clients like that was his way of achieving that international exposure, but yeah , I can see both sides of the story.

But I tend to keep my investing super, super basic. I just go for like low fee total market index funds. It’s been working out.

Bryce: There’s nothing wrong with that [01:29:00] approach. But that is a more active investing approach. I know people who know the tech industry very well.

So they just they put all their money into like tech companies that they know well, and they’re going to do well in those kinds of stuff. Fine. If you know the sector, the industry, you spend a lot of time researching it. That’s great. The nice thing about index investing is Is you don’t need to know anything you just buy

Kristy: everything right it also makes me think of this presentation that was done like warren buffett did this presentation where he was just showing like companies around the world and which ones were the biggest back in the 1980s and the top 20 world, like most of them were Japanese companies, but then you’re like fast forward today and most of them are American companies. And it’s totally different field from what you were expecting back then, which was like automotive.

So it’s, it just shows you that you, even though you’re picking a really good company now, like 20 years from now, it could. Totally not even exist. And how do you know that? How do you don’t have a crystal ball? Even though maybe you can edge out more of a game like I would prefer to not have to predict anything and just be able to sleep at night and just have it be passive and Not have to do any of that work.

Bryce: Also, we have to take into account the, I guess, [01:30:00] expertise level of our audience. So, I mean, I can’t expect our audience to also be like, following shipping lanes, like following what’s happening in like shipping lanes across like the ocean and this kind of stuff.

I have to assume that our audience is just new and new to investing and just goes. What’s the easiest thing that I can do that will get me a pretty good result. So index funds is the

Captain Fi: right answer for that. Love Keeping it simple. Yeah. And interesting note, and it sounds like you guys don’t, but do you use leverage or have you ever considered using leverage for your investments?

Bryce: No I’ve seen many people use leverage successfully, and I’ve also seen people get blown up by it. Leverage the. Principles behind index investing and why it’s so such a successful strategy is over the long term because of the way that indexes are created is that the index cannot really effectively go to zero because for the index to go to zero, all companies in the index have to go bankrupt, which isn’t going to happen.

So when you are investing in an index fund and it goes down, like what happened like [01:31:00] last year when interest rates were increasing, if all you have to do is wait. For it to recover and it always eventually recovers what leverage does is it takes away your ability to wait if there’s a really sharp decline in the value of a certain ETF or a certain stock, if it’s too sharp, the person, the brokerage account or the bank that you got the leverage from, , they have the ability to call the loan, right? They have the ability to go, Hey the stocks that you’ve invested in have dropped too much. I’m worried. I’m not going to get my money back. So I’m going to force you to sell. And that’s when things go really badly for you. So adding leverage in does allow you to goose your gains, but it also gives the ability for your portfolio to get blown up by things that are really outside of your control.

So for that reason, I don’t recommend it really for any of our readers.

Captain Fi: Yes, that’s I’m a big fan of the indexing approach as well. And yeah, steering clear of I guess using a heavy amount of leverage. Although I must submit, I do have a mortgage on an investment property. It’s only, a small proportion of my investments.

So technically, but we know that Someone could say that I [01:32:00] am using leverage, but I like to think that it’s a very small percentage. I think it’s about 20 percent of my investment. So I feel safe using it, but I certainly wouldn’t want to be highly leveraged at all. Oh,

Bryce: That’s what we need to do for an investment property, right?

 Because that way by keeping an amount of leverage on the property. You have more of your capital to invest in other investment properties if you so choose. The game for investment real estate , it’s a very different game from stock investing.

So the rules are different. So people sometimes confuse. What’s the correct thing to do in one game as the correct thing to do in another game, but that makes as much sense as, Oh, this move worked in chess, so I’m going to try it in checkers. It’s Nope, different games, different rules.

You gotta learn it all again, right? So it’s, so what you’re doing is correct for investment real estate, but it’s not the correct thing to do for stocks.

Captain Fi: Yeah, look, I’ve got a couple of other questions that I usually like to ask, but I think we’ve actually hit them all. On this interview, and I reckon I could answer them.

So did you have a fine number that you were aiming for? And yes, it was 100, 000 a [01:33:00] year in income, but now it’s only 40. And you generating more than that with dividend fire you were talking about the 4 percent rule and the yield shield. And about your withdrawal rate. Well, we’ve covered that as well.

You’re using a combination of conventional shares, index funds and hybrids. And you are withdrawing around 4%. You’re not having to sell down your portfolio. So, so tick there housing team, pay off the mortgage, team, keep the mortgage or team rent Vesta.

Well, clearly team rent Vesta, right? So this is a good question. This is a juicy one. This is , , my last real question before we just ask about a couple of learning resources

As a couple that have. You’ve gone through fire, you’ve done the reading, you’ve done the math, you’ve come up with a plan, you’ve done it, and you’ve spent a decade in early retirement. What’s it been like, and what does it look like for you now, 10 years later, versus at the start?

Kristy: It [01:34:00] has been quite the ride, because I, yeah, I think Bryce mentioned this a little bit earlier where there’s different stages of retirement, which I was not expecting.

When I first quit, I was just like, yay, goodbye job give the finger to your boss and then just ride off into the sunset and then happiness forever. And it’s not actually like that. It’s actually. The four different stages are, you initially are ecstatic and you have this , honeymoon period, which just having fun and decompressing from your job for maybe the first year or two.

And then the next section is you’re a little bit broad and disillusioned and you’re like, what am I going to do with my life? And then you have that. Emotional breakdown and like a identity crisis because you’re like, who am I? What am I doing? What is the point of all this? And then the third stage is Reinvention and what in that you start doing other projects like what we did was like Oh, we’re gonna do a second career because we like writing so much And we already learned how to write by writing the children’s book while we were working and who cares if we make any money From writing we’re just gonna do it for fun.

And then somehow that turned into money a completely [01:35:00] a surprise to us but then it went crazy and that we just get on another treadmill and it’s okay, now let’s do a TV show. Now let’s do conferences. Now this and that, and then you’re burnt out again. And then the final phase is when you actually do the like internal reflection and you start to realize that happiness comes from within and not without.

And then the pandemic helped us. Get there just by wiping everything off our schedule and making me realize that what is actually really important to me. Family is really important to me. My ego is definitely not important. I don’t need to do all these projects. I just need to do the ones that actually make me happy and give me my time back to spend with my family.

 And experiences are really important to me. So, and then going through all this childhood trauma and like going through the guilt of does it make sense to retire? , am I doing a disservice with my parents who worked really hard? And wouldn’t other people give the right arm in order to have a job like mine?

And just having that internal kind of being able to figure out your demons and then figure out who you are and what you actually want to do with your life. And then you end up in the very I’m now we’re very [01:36:00] happy and. In a very peaceful place in that we have no regrets and we realized that the most important thing that fire gave us was the time to actually help our parents when they absolutely need it because your parents will get old and there’s nothing you can do about it and health crisis will happen and it’s a blessing to be able to just drop everything and be there for them and just live with them 24 seven and help care for them if you need to.

So fire has been. Thank you. The journey of fire has been very surprising and it’s definitely not linear and it’s going to be different for everyone, but definitely the takeaway for the last 10 years is fire doesn’t solve all your problems, but it’s a tool to give your time back so that you can solve your problems.

Captain Fi: Well, I think that’s very well said. It doesn’t solve your problems, but it gives you the time so that you can solve your own problems. Yeah, 100%. I agree with that. And I’m still working through my problems. Now, look, I love to ask this question to everyone. And I guess it’s because one of the best things we can do on our own journey [01:37:00] to fire is to look at what people are doing.

Doing who have gone before us so that we can emulate them, right? And it’s especially true with self education. So with that in mind, do you have any favorite resources that you used on your journey to fire? And even now as you go through self actualization that have really helped you, like this might be books or blogs or different podcasts that you’ve found particularly useful.

Kristy: One of the books that I found changed my life in terms of the mindset stuff was Thich Nhat Hanh’s The Miracle of Mindfulness. And he does it in a way , that I enjoy because there’s no Religious aspect to it is more really just like the secular buddhism in which it talks about like the scientific Backing behind being present and like how to breathe and how to think about your existence so so that I found that was really mind blowing meditation just in general and weirdly enough I Couldn’t really meditate until I went to Thailand, because I think being in a big city, because we have to come back to Toronto every now and then to visit family, [01:38:00] it’s hard to be in that mindset, because everybody’s just very go, need to get there, need to climb the corporate ladder, talking about work all the time, and it wasn’t until I was in Chiang Mai, which is a very spiritual place, and like a lot of people are meditating with other people, that I learned how to be present.

So I, I would say that. For people who are becoming F. I know that it is a journey and once you get to that part of self actualization, when you’ve taken care of the money, you figure out your identity when you get to the self actualization piece know that it will take some time and it’s not going to be instantaneous, but it will be worth it.

Captain Fi: Awesome. And now look, this leads me to my last question, which everyone hates. If you could distill your experience and message down into three. Top pieces of advice for someone pursuing fire. What would they be?

Bryce: I guess, stop giving a shit what other people think because they’re not living your life. Right. I mean, that, that was a big psychological thing for us when we were first starting out because, society, our [01:39:00] culture is always telling us to do something and even though we knew mathematically it was the wrong thing to do, it took a lot of courage to to go against the grain.

Math shit up, I guess, is another one because math doesn’t lie to you, right? Math is truth and if you know how to understand math scares a lot of people. But the weird thing, like unlike engineering where it’s like, there’s all this like calculus and algebra and then all this kind of fancy stuff that requires like a university level education to figure out.

Finance is basically just high school math, right? Basic addition, subtraction, multiplication, and division , is basically all the mathematical tools you need to figure out the math behind finances, because it’s not that complicated You just have to not be scared of it and not be intimidated by it and then have the courage to find the right people to , teach it to you.

And I guess the third thing is financial independence isn’t difficult. But it does require a lot of discipline. So, when people come to this thing and say oh, I’m not smart enough. It’s you don’t need to be smart, but you do need to be able to execute on what you’ve [01:40:00] learned.

So, that’s the three takeaways that I would distill

Kristy: I think since you’ve gone down the logical route, I’m going to go more of the emotional route. Sure. And I’m going to say the three things is, number one, don’t take advice from people who aren’t happy. If they’re not happy, why are you taking advice from them?

So , the advice that they give you it’s not going along the lines of what you want. And the second one is, even if they are happy, if they’re living a life that you don’t want, that’s still not relevant to you. Even us if we’re happy, but we’re living a life that you don’t want, then don’t take advice from us.

It’s not relevant to you. And then the third one is a bit dark in that I would say, Pretend you’re planning your own funeral and write your own obituary. Now that’s really dark, but it forces you to figure out what your real values are. Because it doesn’t matter if you’re rich or poor, and it doesn’t matter what background you’re coming from.

Like we’re all eventually going to end up dead. So when you’re dead and you’re on your deathbed, what is it that you’re going to reflect on that’s actually important to you? Because you don’t ever want to run into the problem of being on your deathbed and having regrets because at that time [01:41:00] you will have run out of life and there’s nothing you can do to change it.

So pretend that you are planning your own funeral and write your own obituary and figure out what it is that you lived for and what your life meant to you. And if you’re

Bryce: happy with how obituary sounds, then that’s great.

Kristy: Yeah, you’re already there.

Bryce: But if the obituary that people would write for you, or you would write for yourself is not what you want it to be, then it’s time to make a change.

Captain Fi: Wow. You’ve given me flashbacks to a, an experience from A psychedelic meditation where I was actually at my own funeral and it was , very confronting experience, but I think like it almost made me feel like exactly what you just said about exploring your own values.

And yeah, wow. I think those are some great points. Look, I’ve had an absolute blast. . I really appreciate your time.

 And again, I’m like super tickled pink that I’m able to chat to, I guess some of the pioneers and some of my like idols and role models in the fire community. So. I’m super grateful for this opportunity. Oh,

Kristy: thank you so much for having

Bryce: us. And next time we’re in Adelaide, we’ll be sure to look you up.

Captain Fi: Yeah, absolutely. Mate. Well, look, I’m [01:42:00] about to publish a article of all the cool things to do in Adelaide. So yeah. And if you’re into like food and wine and like cool experiences and recreation, , Adelaide’s actually , it’s a bit of a sleeper cause everyone teases Adelaide as being not very good, but there’s actually a lot of awesome stuff to do here.

So I’d be more than happy to take you guys around and hopefully by then I’ll have sorted out a little. Private aircraft and want to get back into doing some recreational flying and , might make it a bit quicker to get from point A to point B.

Kristy: Awesome. Yeah, we love Australia having been there just a couple of months ago, so there’s very high chance that we will

Bryce: return.

But we only hit up Melbourne and Sydney, so we

Captain Fi: really scratched the surface. We definitely need to go to way more places. And we also really know people from Melbourne and Sydney. Really

Bryce: don’t like each

Captain Fi: other. Yeah, , they’re the two big cities. Yeah. Sydney seems to be like this hustle and bustle center of commerce and Melbourne seems to be maybe more of a lifestyle city, but it’s still huge.

But yeah, Adelaide is definitely just a tiny little country [01:43:00] town in comparison, but that’s why I love it. It’s got a lot of charm to it. It’s a lot quieter. It’s definitely a lot more aligned to my values. And I think you guys will really enjoy it. Awesome. Sounds great. Cool. Hey, so, before we head off, where can listeners find out more about you and like, where can they get a copy of your book or read your blog and find out more about you?

Kristy: Yeah. So, you can go to the contact us section on www. millennial revolution. com so that lists all our socials and our the email that you can contact us at and our book you can buy on Amazon, pretty much any local bookstore near you.

Captain Fi: Awesome. I’ll include links in the show notes. So if anyone wants to check out Kristy and Bryce’s website jump onto the show notes, there’ll be links to their website their book and all their social medias definitely you need to go and check out their blog.

Definitely have a read of their book. It’s. Awesome. And yeah, they’re obviously really cool people. So good to keep up with what they’re doing on social [01:44:00] media. And I’m sure they’ll be more than happy to to have a chat with you again, guys. Thank you so much for your time. It’s been an absolute blast.


Kristy: problem. Thank you again. Bye.

Captain Fi: Thanks for listening to another episode of the Captain Fire Financial Independence Podcast. To read the transcripts or check out the show notes, head over to www. captainfire. com for all the details. If you have a question for the captain, make sure to get in touch. You might even make it on the airwaves.

You can reach me online through the Captain Fire contact form or get in touch through the socials. I’m active on Facebook and Instagram as well as a number of online finance and investing forums. And finally, remember, the information presented on the show and the links provided are for general information purposes only.

They should not [01:45:00] be taken as constituting professional financial advice. You should always do your own research when making any financial decisions and make sure it’s appropriate for your personal circumstance.

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