Our Plan to Reach Financial Independence

Let’s take a look at our plan to reach financial independence. How far we’ve come and how close are we? D. and I met in 2009 with a combined debt load of approximately $30,000-$40,000 (student loans) with no real assets. We got married in 2011 and purchased our first house.  By then, we had no student debt and we put 5% down on our first house.  After 2011, we really started saving.  3 years later, we saved $100,000 to put 20% down on our next home (a gigantic mansion that was too big in hindsight). Now in 2017 our net worth is over $400,000.

Our plan to reach financial independence is pretty simple and has 2 parts

Plan to Reach Financial Independence

Part 1

We need to bring our monthly and annual expenses as low as possible without sacrificing our life enjoyment.  Many posts will follow on this process.  Our plan was to bring our annual expenses down to $30,000.  We fully still believe this is possible.  This will primarily be accomplished by purchasing a smaller house in a smaller town for much less than we own now and not having a mortgage on it.  Additionally, we will have no daycare payment, no car payments and reduced property taxes. A few points you may be wondering about…

  • How cheap can housing be? We have come to realize that we would be very happy living in a smaller house.  1200-1500 square feet is all we really need even if we become a family of 5.  We also have time to choose the house we want.  The city that we will be moving to is close to our home town located in Northern Ontario.  This city  has very good value housing options.  Additionally, we have access to a reliable, professional contractor (my dad).  He will help us renovate an “under valued house” for us at a reasonable rate.  We have seen some good options (mostly bank repos) for as low as $70,000-$80,000. We plan to allocate $110,000 to this project for a purchase and substantial renovations.
  • No car payments? Yes… we don’t have them now and we don’t plan on financing any vehicles in the future.  We will always aim to purchase reliable used vehicles every 4-5 years in cash. Our lifestyle involves lots of walking and biking and the town we will move to will allow us to avoid driving and reduce our car usage substantially.
Part 2

Establish enough passive income and savings in order to quit our full time successful careers without risk. This plan is already on track.  We now own a 4 unit apartment building that is generating cash flows of $1,500 per month.  Additionally, we plan on purchasing one or two more rental properties in the next year.  We plan on achieving a passive income of $20,000-$30,000 on our rental properties.  More on these projects later… We have many other ideas for sources of income if we run into difficulties in the rental market.  I have an MBA, and D. is CPA so we have lots to offer from accounting, to consultation to numerous small business ideas.  Lastly, we already receive over $300 in government child benefits. These amounts will increase once we do not work full time.  We do not want to rely on government benefits since these can come and go however they do help reduce the risks of this plan.


We have decided that this is what our financial picture needs to look like in order for us quit our jobs (we are getting close!).

  • Current primary residence sold, generating $160,000
  • The $160,000 will be used to purchase of a new primary residence and renovate it using $110,000.
  • Remaining $50,000 will be used to purchase a second income property and renovate it. We are aiming for a property valued at $150,000-$200,000 with 20% down.
  • Other savings in the next 12-18 months will be used to continue renovating our existing rental property and possible purchase a 3rd rental property
  • We will have $100,000 saved in a TFSA (Tax Free Savings Account). This account should generate 5-7% per year in the long term.  We will not be rely upon this money and will be used only as a back up plan.
  • Our RRSP savings and government pensions will not be touched until we are 55.  Along with the TFSA we will have a generous pension fund waiting for us at 55 if all else fails.
  • An RESP (Registered Education Savings Plan) with a balance of $15,000.  This fund will continue to grow at a rate of 4-6%.  We plan on using it to help our kids for a small part of their college/university fees if they need it. We do not plan on paying for our children post secondary education but will help them.

I will post updates on our plan to reach financial independence quarterly.

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Plan to Reach Financial Independence

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2 thoughts on “Our Plan to Reach Financial Independence”

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