

I learned about financial independence through a chance conversation with a friend. In this post, I share my discovery of financial independence, learning how to invest and pursuing my passion for personal finance.
The following is a guest post by Mr. OYP (“Owning Your Profession”) who posts on this site from time to time. To read more about Mr. OYP (and Ms. OYP), click here.
I grew up being a saver and always believed I was financially savvy. I used to love getting my allowance as a kid and putting that crisp $5 bill (or loonie or quarter, etc.) into my piggy bank. When I got older and had part-time jobs (and was still living at home with no expenses), I felt pride in watching my chequing and savings accounts grow.
My finances got a little off track once I finished law school and started collecting that sweet, sweet lawyer money. I got caught up watching other lawyers (most of whom had been in the practice for much longer than I at that time and were making higher salaries) drive Benzes and BMWs, go on fancy vacations and live in nice homes in good neighbourhoods.
I thought I deserved all of those things too, so I threw caution to the wind and started to accumulate some of the trappings of the “successful” lawyer. While I intend on writing a post about my worst financial mistake in which I will go into more details about spending money in the first few years of my career, this post will cover a conversation that snapped me back to my frugal ways and realigned my path to financial independence.
About a year and a half ago, I went for beers with a friend. I’ll call this friend Craig. Craig is a super smart, hard-working, superstar lawyer who makes a great income (his wife is also a very successful, high-earning professional). Yet, Craig never bought into the lawyer lifestyle. For years, Craig had been casually talking to me about investments and had been dropping terms like, “ETFs”, “REITs”, “index funds”, “DRIPs”, “dividends” and “F U money”. Craig never pushed his knowledge on me and I was always too proud to ask questions, so I just pretended I understood what the hell he was talking about. Wish I would’ve just swallowed my pride earlier!
Anyway, on this aforementioned fateful night of beers, Craig and I got talking about our gripes with the profession and how to make life better. The conversation led to Craig’s belief that money led to freedom – the freedom to make choices based upon his values. For Craig, money also led to peace of mind. He didn’t want to be working in a stressful career just to pay off debt. He wanted to be working so that he could save (and invest) his money so that he has choices later in life. Now, to be clear, Craig wasn’t talking about saving money so that he could exit the profession. Craig enjoys being a lawyer (and as I mentioned above, he’s damn good at his job). He just wanted to have the ability to make his own choices later in life and not be so tied down with debt that he is forced to make a large salary simply in order to pay for his lifestyle.
Craig and I had had similar conversations in the past. But, previously, I would agree with Craig and then forget the conversation and just keep going on with my life. I would pretend I fully understood Craig and I took no action. Well, on this night, I had enough liquid courage to ask Craig to explain what an “ETF” was, and then what an “index fund” was, and so on. With each explanation, I thought, huh, that sounds interesting (truthfully, I didn’t fully understand at the time – I learn more by doing than listening). Craig told me about how he invests his money himself through a direct investing account. This was all exciting, but I still thought that it sounded too complicated for me. Up until that point, I was comfortable with saving and throwing money each month into a mutual fund at my bank. I thought that I needed “a guy” to make investments for me. I couldn’t do it by myself, could I?
Craig told me about financial independence and this thing called the “4% rule” and the “Trinity Study”. Now, this 4% rule (it’s more of a rule of thumb) was a super exciting concept. If you don’t know what these are, I encourage you to look them up. Craig wanted to get to the point where his investment returns and dividends could pay for his basic living expenses each month – at that point, he wouldn’t be completely reliant on his salary. Now, while I thought this was exciting, I was skeptical. I had grown up thinking that the only path in life was to get a job, pay for your life with the paycheque from that job, and work until you’re no longer able. How could someone invest enough money to pay for their lifestyle?
Craig and I ended our night and I remember buzzing (not just from the booze) and having this overwhelming feeling of excitement. I got home and excitedly told Ms. OYP about our conversation. I bungled through my explanations as I didn’t really understand everything Craig had said. Ms. OYP looked at me like I was crazy (and probably just thought these were tipsy ideas and I would forget about them when I woke up in the morning).
The weirdest thing happened the next morning…I woke up still thinking about my conversation with Craig. For some reason, this conversation with Craig resonated with me and I spent the next couple months reading personal finance blogs and listening to as many personal finance podcasts as I could find (a list of my favourites are in this post).
This night with Craig changed the course of my (and Ms. OYP’s) financial life. I went on to open my own direct investing accounts, I transferred the money out of my mutual fund (this mutual fund had an MER of 2.6%, which is insane, but I never gave it any thought until after this conversation with Craig) into my new TFSA direct investing account, Ms. OYP and I sold our cars to buy a used vehicle and transitioned into a one vehicle household, I canceled cable and took a hard look at my expenses and cut as much as I could. I then took the extra money I wasn’t spending each month and funneled it into my direct investing accounts.
This conversation was my A-HA moment. Thankfully, while she was initially very skeptical, Ms. OYP is on board and has cut her expenses as well. We now both save an absurd amount of money and do our own investing. The best part about all of this (aside from watching our net worths increase dramatically), is that we haven’t missed any of the things we cut out of our lives. We don’t feel like we are depriving ourselves at all. Each dollar we save now means we have less to save in order to eventually cover our basic needs with investment and dividend income. It’s not deprivation, it’s just being intentional with money!
Craig changed my life for the better with this conversation and I can’t thank him enough! With the wonderful blogs and podcasts out there, I was able to take this conversation and learn for myself all I needed to know in order to have the confidence to take control of my finances. You don’t need to be a financial guru in order to invest! Take the time to learn about index funds, ETFs and the like. You may eventually get comfortable enough to do your own investing in low cost ETFs and save yourself a s#@$ ton of money throughout your life in investment fees that your mutual fund or your “guy” is charging you!
If you’ve already taken the time to learn, then be open to having these types of conversations with your friends, you just might change someone’s life the way Craig changed mine!
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