This is the end
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I'll never look into your eyes...again
And so, Gentle Reader, we end where we have started. Strangers in the dark, never really knowing each other, but passing, sharing a few thoughts and then moving off in our own directions.
I have now completed my course on Blogging. As a result, I will finish up this blog, and continue on my self imposed Luddite path in life. I don’t have a Facebook account, you won’t find me on Pinterest, Instagram, or Twitter. I have no iPhone, and instead choose the old school iPencil and iPiece of Paper. I write long hand. I use a land line telephone.
The world is changing, and I’m not exactly sure I want to change in the direction it’s moving.
Dead is the new unambiguous. Bipolar is the new undecided. Heavily armed is the new born again. Bald is the new head... and the new crotch. Hairy is the new face. Sheepishly admitting to having an STD is the new flirting. Purell is the new face of fear. Finding the time that's right for you is the new impotence. The smiley-face emoticon is the new "sincerely yours." Smoking is the new outdoorsy lifestyle. Looking forward to insanely expensive private schooling, thousand dollar a week nannies and soccer is the new yuppie birth control. Misinformed is the new patriotic. Serotonin uptake inhibiting is the new crowd control. Texting is the new talking. Talking is the new singing. Singing is the new hubris. Gay marriage is the new "be careful what you wish for." And finally, and only because I really need this to catch on, fifty-five years old is the new forty.
Hopefully you’ve found something that resonates with you, or that you can use at some point in the roughly 16,000 words I’ve written over my meandering posts.
As in physics, a body in motion is typically going to keep moving along the same trajectory until another force comes into contact with it and helps alter the path. People that were good savers and investors in life, tend to remain that way, people that are bad with money – well, we all know how many lotto winners usually end up in worse financial shape than before they won the grand prize. People that embrace life, thrive on learning new things, and enjoy freedom will continue that same love of growth in retirement.
In my observations during early retirement, the people that struggle tend to be rigid, structured, and financially worried. As the wise sage Taylor Swift suggests, Players gonna play, Haters gonna hate, and I’m jus’ gonna shake it off:
So my final suggestions? Stay financially liquid, diversified, and balanced; don’t invest all of your money into a one asset strategy, your principal residence, and expect that to be your retirement plan. You wouldn't pour all your money into one stock and you shouldn't do it with one house at one address in one city or town. Houses, like any other asset class can go up or down, and unless you’re renting out rooms, they give you no cash flow.
Stay as healthy as you can. Exercise, jog, do yoga, ride a bike, even just walk. The key is to stay moving and limber as long as you can. Try eating less meat, dairy, and processed foods. Maybe even try being a Vegetarian or Vegan-ish for a day a week. Your body and the planet will thank you.
Keep connected. Not just through ‘social media’ but in real life. Meet new people, try new activities, be the friend to someone else that you've always wanted. Laugh, take a course, join a group – whatever it takes to get out of the house and connected.
And finally, embrace and love yourself. Accept that you are the only version of you that there ever was or ever will be. Use your time on this planet to explore who you are, what makes you tick, and then give that back to the universe in some way. Find your purpose, your passion, and your Zen.
Thank you for sharing this part of the journey with me. I appreciate those who left something for others to use, and those who took what they needed on their own journey.
Until our paths cross again, I wish you positive energy, healing for those who require it, and an interesting journey towards ‘Self’.
I wish you the light of a thousand suns.
I must admit, there are certain types of behaviors in myself and in others that irk me. I’m not talking about a rage, but a low simmering boil that eats away at my soul. Like the slow, drip, drip, drip, of what they once called Chinese Water Torture in which the victim was held motionless for days, weeks, or months, while a slow but constant dripping of water onto their forehead either wore a hole into their skull, or slowly drove the victim mad; this is what it sometimes feels like.
My most recent ‘peeve’ is a combination of my perfectionism, and what appears to me to be the relentless erosion of common courtesy and manners brought on in no small part by the dehumanizing impact of ‘social media’. Increasingly, as I’m out for my daily jog, people driving by feel it is their right and responsibility to scream obscenities out their open vehicle windows. I’m doing my own thing, not in their space, not impacting their lives in any way, and this mean spirited, boorish behavior is becoming common place. I expect the best from people and situations; I was brought up to believe that most people play by the same rules in life. I was wrong.
When I was a child I was taught the saying, “Sticks and stones may break my bones, but words can never hurt me.” At the time, I saw the sense of it. Words, being intangible, have no ability to inflict physical harm. Whenever another child said something mean to me, I would loudly recite the saying at them, using it like a magical incantation that would protect me from getting my feelings hurt. I usually said it with tears running down my cheeks. As an adult I’ve come to see that the saying is, like many things taught to children, a lie.
The truth is that bones heal, while the damage done by words can last a lifetime. I bring it up here only to remind those of us whom are truly awake in the world that the universe now, more than ever, needs kindness, and there is power in our actions and words to wound. The power to be mean. The thoughtless among us have absolutely no power to affect our likely long term success or failure in life. In that arena they are laughably impotent. Unengorged. Limp. Flaccid, if you will. Forever poking, but never really penetrating. But I should tread carefully here. I don’t want to now become the very thing I decry. One who uses words to try to hurt. Having been a victim of attempted verbal abuse, I certainly wouldn’t want that on my conscience.
Instead I pity the rude, the uninformed, and the mediocre. By focusing on me, and my running, they are no longer focused on their own path. Their attempted abuse and disregard for others is, in my opinion, a reflection of their own internal insecurities and struggles.
You see, we are not human beings having a spiritual experience during our time here, we are spiritual beings having a human experience.
Every now and then I lose focus on the greater intent, and get mired in the muck of my own expectations and perfectionism, and as a result, get dragged down by those that would attempt to drag any stranger they meet into the primordial slime with them.
This point was illustrated clearly to me while on vacation when I encountered a crab fisherman catching crabs off a pier. As he caught the crabs he would simply fling them into a barrel. There was no lid on the barrel, so I asked the fisherman, “Aren’t you afraid your crabs will get away?” He smiled and replied, “Nope, they won’t let each other.” I didn’t know it at the time, but apparently it is common knowledge and is quite broadly accepted as an analogy for cooperation or the lack of it among people.
I looked closer and observed as one or two crabs got close to the lip of the barrel, crabs lower down would grab hold of their legs and try to use them to pull themselves out. The result would be that no crab would ever get out, because the lower crabs would always pull the higher ones back down before they could escape.
If the crabs cooperated and helped each other out, they could all eventually escape back to the sea, but the self-centered behavior of individual crabs costs the potential escape of any of them.
Life is a lot like that. People have difficultly escaping poverty or addiction because those around them want things to be the same, or to pull people back down to their level. As a result, one of the first things suggested in addiction treatment is to avoid the same old people and situations that draw you back into the same cycle of behavior.
It’s also a lot like that with Early Retirement. Those who are stuck in jobs (the crabs in the barrel), will often make rude comments such as, “Oh, you’re too young”, “I’d be bored”, “What do you waste your time on all day?”, when in reality they want nothing more than to be free like you. Envy and jealousy are often delivered to us in pretty packages named”Peer Pressure”, and “Judgment”.
From now on when I’m out enjoying my day and someone cat calls from their passing vehicle, I will visualize that barrel of crabs, and in what position in the barrel the driver of the car must be.
Life is good outside the barrel.
Many people have built wealth and continue to have a positive cash flow through real estate investing. As with other investments, it’s best to do your research, work with professionals, and take your time to find an investment that matches your lifestyle.
If you enjoy meeting and dealing with people, have experience as a handy-person, if you don’t mind having to meet the needs of customers and have an aptitude for dealing with people’s personal issues, then being a landlord may be the right fit.
On the other hand, if you’re more of a hands off type person, who loves to travel a lot and are a free spirit, but you still want the regular cash flow of real estate, then perhaps you might choose a REIT (Real Estate Income Trust) instead.
Both are investments in real estate, both can potentially provide you with a regular monthly rent cheque, and both are impacted by interest rates.
I wrote a blog about being a landlord here, but the key is to find the right property at the right price. If interest rates go up and you have an open mortgage on your rental unit, will it squeeze your cash flow too much to keep the property cash flow positive? What if you get bad tenants who do extensive and costly damage?
The first thing to do is to run the numbers on a potential property versus an alternate real estate investment. For our example, and to keep things simple, let’s assume our make believe couple, Joe and Mary have $400,000.00 dollars to invest free and clear with no mortgages.
They find an up and down unit in a raised bungalow with three bedrooms in the upstairs unit and two bedrooms in the lower unit. The previous owner has done all the necessary updates over the years, so after an inspection, they do not need any major repairs or upgrades at this time. Magically, the closing price will be exactly 400 K, the same amount they have available to invest. After municipal taxes and allowing for house insurance and a modest budget for ongoing maintenance, they would be able to claim a NET profit of $800.00 per month for the basement suite and $1,200 per month from the main floor suite, for a total positive cash flow of $24,000 annually per year. Wow, pretty good. Why not invest? Well, not so fast, let’s compare it to other investments in Real Estate. The actual return on their 400K is somewhere around 6% per year. IF they keep the place rented, and IF they don’t have to do any major repairs, and IF… well, you get the picture.
Compare this to a random REIT I picked out of a large potential pool, Dream Office Real Estate (D.UN). This particular REIT used to be called Dundee, and leases out commercial office space mainly in Toronto and Calgary. Units can be bought and sold on any Canadian on line brokerage site, and units are currently trading in the $27.00 per unit range. The yield is currently just over 8% based on the $27.00 unit price. This means that D.UN will pay you a monthly distribution from their rental pool of 8%. Based on Joe and Mary’s investment of 400K on an 8% REIT yield, they would be getting $32,000 per year from owning the REIT versus $24,000 if they owned, maintained and operated their own up/down rental house. Hmm, and no having to fix toilets or deal with pesky renters doing damage.
An alternate play is to invest in a REIT ETF (Exchange Traded Fund). With a REIT ETF, there is a large pool of separate REITs bundled together to spread risk over a large geographical area, and among different types of real estate. One that includes malls, office space, and large apartments across Canada is the ZRE ETF. It currently trades at $20.98 and after a MER (Management Expense Ratio) of .55% it provides a 4.78% yield. ($400 K with a 4.78% yield provides $19,120.00 in yield).
In the scenarios provided, Joe and Mary can put all their money into one address, on one street, in one city. (6% yield, highest risk), or they can buy units in a single REIT that has rented office towers in Calgary and Toronto (8 % yield, lower risk), or they can buy an ETF which spreads their risks across several REIT groups, across several types of rented properties, across a broad geographical area. (4.78% yield, lowest risk)
Of course, this was just a brief, hypothetical example, and past returns have very little relationship to future potential returns, and do not consider taxation or long term interest rates, but it illustrates a point which is to take your time and always consider your financial goals, your cash flow needs, and how much personal involvement you desire in your real estate plays.