FIRECracker is a world-travelling early retiree. She used to live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC’s On the Money has garnered 4.5 Million views.
I’m not going to lie. It’s been a rough couple of days. After we finally got back on track with our son’s stomach bug recovery, he caught another bug which affected his sleep so much, for a few days we essentially went back to the first month of his life, waking up every hour in the middle of the night. Luckily, we are fortunately enough to have wonderful friends traveling with us, and they were able to do shifts with us until he went back to his normal sleeping schedule. This might have something to do with the fact that we put him in an international daycare for one month to try out World Schooling, and didn’t realize how lucky we had it, avoiding all these bugs because we took care of him ourselves for 90% of the time before the age of 2.
As they say, travelling with kids is hard, but staying home with kids is also hard, so while it’s been difficult, I still don’t find it that much harder doing it on the road than staying in one place (more about that in a future post).
So, while he’s finally napping for the first time in days, I’m able to dig into our queue of reader cases and get this one written.
Without further ado, here’s today’s reader case:
Hello! Thank you so much for all that you do. I read your newsletters faithfully, and LOVE your book! One of the few financial literacy books I own.
I am essentially starting over after a bad (such an inadequate word) experience with an abusive husband. I just recently went back to work after healing from a traumatic brain injury in 2020, am currently single and childless.
I am 60 years of age, Canadian, female.
Not long ago – just over 4 years ago – I received an expected inheritance of ~$350,000 which is now lost to the ex-husband. I am in court to try to regain some of what was stolen. This helps account for why my personal savings are so low – I expected a cash inheritance in my late-adulthood. Let me be a lesson to all in that respect – don’t wait to start saving, no matter what the future holds. It can be taken away.
- My monthly family spending: $3339
- My gross/net annual family income: $70,103/55,000 (started job in May 2025)
Debts:
- Mortgage interest rate: 4.64% fixed until October 2027
- Minimum monthly payment: $926.18
- The outstanding balance: $139,141.45
- No other debts
- Use CC sparingly, pay off entirely each month
Fixed assets: Car ~$28,000
House: ~$300,000
Investments or savings you have (cash, bonds, stocks, etc.): $69,995
- Investments $15,000
- TFSA $7,300
- RRSP $37,694.92
- Cash $10,000
- I have a small pension that will pay ~$1000/month when I retire in 5 years
For a couple of years I followed your sample portfolio and still own what was suggested then – I was finding the learning curve too high so it was on auto-pilot. I had very low income so I stopped adding to it. I am ready to start again but don’t know if it’s still the recommended portfolio. I was looking at your website for guidance on this when I saw your “Case Study” section and was reminded to write you.
I truly hope this is interesting enough to enough of your readers that you will consider writing about my situation. As I near retirement I am feeling a lot of fear, not fire. My next step will be to seek out the services of a financial advisor, but I’d like to do as much on my own (self-directed) as I can. As my brain heals, I am able to take on more, but I’ve never been savvy with money.
With thanks and kind regards,
HealingBrain
First of all, I’m so sorry to hear about the ordeal with your ex-husband and the traumatic brain injury. That’s terrible and you shouldn’t have had to go through all that. *hugs*.
I know words can’t actually help shitty situations like this and I sincerely hope you have a community of friends and healthcare professionals who can help you heal.
I’m useless in the healthcare field, but hopefully by helping to sort out your finances, I can at least ease some of your financial burden.
Okay, so let’s first summarize your situation:
Summary | Amount |
|---|---|
Income | $70,103 (gross), $55,000 (net) |
Expenses | $3339/month or $40,068/year |
Debt | -$139,141.45 ($926.18/month @4.64% interest) |
Property | $300,000 (or $285,000 after 5% real estate agent fee) |
Investible Assets | $15,000 (investments) + $7,300 (TFSA) + $37,694.92 (RRSP) + $10,000 (cash) = $69,994.92 |
Pension | $1000/month or $12,000/year at age 65 |
Given that HB lives on $40,068/year, she’ll need $1,001,700 to reach FI.
The good news is that in just 5 years, her pension will kick in, boosting her income by $12,000/year. And not only that, as a Canadian, she’s entitled to OAS (Old Age Security) and CPP (Canada Pension Plan).
We don’t know her working history, so we’re going to have make some big assumptions here. CPP is based on her contributions, and pays out an average of $848.37 per month. OAS is based on years of residency, so if she lived in Canada for most of her life life she would get close to the maximum of $740.09. This would give her an additional $1588.46/month or $19061.52/year. This figure would also be adjusted upwards for inflation each year by the Canadian government.
Combine that with her pension, she’d get $31,061.52/year. This covers 78% of her current expense, so her portfolio would only need to generate $9,006.48/year to cover the rest. This would require a portfolio size of $225,162. With her current investible assets of $69,994.92 and yearly savings of $14,932/year (27%) and assuming a conservative 6% rate of return, she would reach FI in:
Year | Balance | Contributions | ROI (6%) | Total |
|---|---|---|---|---|
1 | $69,994.92 | $14,932.00 | $4,199.70 | $89,126.62 |
2 | $89,126.62 | $14,932.00 | $5,347.60 | $109,406.21 |
3 | $109,406.21 | $14,932.00 | $6,564.37 | $130,902.58 |
4 | $130,902.58 | $14,932.00 | $7,854.16 | $153,688.74 |
5 | $153,688.74 | $14,932.00 | $9,221.32 | $177,842.06 |
6 | $177,842.06 | $14,932.00 | $10,670.52 | $203,444.59 |
7 | $203,444.59 | $14,932.00 | $12,206.68 | $230,583.26 |
Slightly less than 7 years.
She’s around 2 years off her goal of retirement by 65, so she’ll need to work until she’s 67 to reach FI based on her current expenses. By age 65, she’ll have $177,842.06 in investible assets, but she needs $225,162 so she’s short by $47,319.94.
Other levers she can pull to reach FI by 65 are 1) get back around $47K from her ex in court 2) reduce her expenses by $1892.80/year or $157.73/month 3) work part-time in retirement to generate $160/month by monetizing a hobby, doing dog walking, or a small gig like that.
To be honest, the easiest thing for her to do is probably to cut her expenses since that’s mostly within her control. May I suggest using Flashfoods to save money on groceries? We easily saved over $100 a month just from this alone.
Use my referral code: KRIS6X8GK to get $5 off your first order.
So, despite having her inheritance stolen, HB can still make retirement work at 65 by pulling one of the 3 levers above. Due to her pension and the CPP and OAS, she’s only off her goal by 2 years.
What do you think? Do you have any advice for HB?
Also, stay tuned for next Monday’s post, because we have a major announcement about something exciting we’ve been working on for the past two years! Can’t wait to share it with you!
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