The Importance of Day to Day

Okay, you are ready to retire.  You have your financial plan all sorted out, you have your first post retirement trip planned and you have even started to disconnect from your workplace by saying no more often.  Yet, despite all of this you really haven’t done the one thing that will matter most when you actually retire.

What is that?

Well, I think the single most under rated things people can do for their retirement is planning out what you day to day existence is going to look like.  Pardon? Day to day? Why the hell does that matter?!?

It matters because let’s face it after the first big trip is over and the initial emotional high of retirement wears off (and yes it will wear off at some point) what you are left with is asking what am I going to be doing next Tues at 3pm.  No that isn’t a terribly exciting question but it is an important one to ask yourself if you want to have a happy retirement.

Retirement more than anything else is about drastically altering your day to day existence.  Your job will be gone and now you will have all this time to do things but how exactly are you going to decide what to do and when to do it?  And if you haven’t given any thought to how you will live day to day, you might find yourself bored, anxious and unsure about living your new lifestyle.

So really what are you doing next Tues at 3pm after you retire?  No idea…you might have a problem coming up.

I’m not saying you need to know exactly what you are doing but you should have an idea of what you could be doing.  What hobbies will you be working on?  What goals that matter to you do you want to complete?  When do you want to get those goals done?  What exactly is your day to day going to consist of?

And it is perfectly find to just focus on relaxing initially but eventually you will get the itch to do more than try to clear your Netflix to watch list or finish reading a 15 book series.  These things are fun but since you don’t actually create or work towards anything concrete they don’t fill you up in the long run.

And it might be tempting to consider the fun answer of: I’m doing nothing.  Nothing is fine when you need to relax but you also have to consider that being happy also means accomplishing something  meaningful to you.  Now exactly what that is can be hugely subjective but the key is to have something long term that you are working towards.

What exactly are you going to be doing with your life now that you are retired?  For me, one of my big things is writing books.  Why?  I really love reading and writing books.  It’s really time consuming work to do and yes it is frustrating at times but I enjoy the result.   But that is just my answer, you need to find your own and while you don’t need to know exactly right away giving the matter some thought  can significantly improve our odds of enjoying your retirement.

After that then you can look at building out what your day to day will consist of.  Keep in mind you can fill it with many things and keep changing it up.  I, for example, like to cycle through hobbies.  So this week I might focus on playing old school video games, next week will be focused on building terrain for our D&D game and the week after I might focus on reading a few books.  The point is I like the variety of hobbies and it allows me breaks on them when I get stuck on something.

So what do you plan to fill your day to day with?

Dec 2018 – Net Worth

Welcome to my net worth posts where I try to prove to myself and you that I wasn’t crazy for leaving work in the fall of 2017 to start my early retirement.   A few important notes:  we are mortgage free and our goal is have our income/investment gains exceed our spending by 102% on a 12 month rolling average (the extra 2% is a buffer for inflation).

Investments

Accounts

RRSP $54,860
LIRA $16,430
TFSA $88,990
Pension $170,100
Wife’s RRSP $88,290
Wife’s TFSA $78,180
Wife’s Taxable $37,330
High Interest Savings Account $38,330

Investment Net Worth $574,170 (-$22,050 decrease over last month from investments)

Home Equity

Estimate $395,000

Income

To keep things simple I’m only going to track what income comes into our main ‘house’ chequing account.  I won’t be tracking my wife’s or my businesses income as those don’t really matter until the money moves over to the ‘house’ account.  Also I won’t track investment gains since that is covered above.

  • Wife’s Monthly Payment to House: $2219
  • Child Tax: $340
  • Interest $29
  • Tim Brewery Income: $96
  • Total Income: $2684

Spending

Last Month $5123

Of course this includes the rest of the Christmas shopping, another $660 in dental work and $1569 for my wife’s Rider season tickets.  Even for us that was a lot of spending.

Results

Net Worth ~$969,170

This Month Investment Gains & Income/Spending Ratio = (-22050+2684)/5123 = -3.78 (Target 1.02 or higher)

Jan 2018 to Dec 2018 Invest Gain & Income/Spending Ratio = (-47285+18081)/35435 =-0.82 (Target 1.02 or higher)

Commentary:

Ugh, that was ugly.  Thank goodness 2018 is over.  Our total investment loss for the year is at 8.11% which is high but not high enough to trigger our backup plans and yes I’m starting to wonder if I wasn’t a bit crazy for leaving work in late 2017.

You might have noticed some big shifts in some of the account values but not all of that was from the markets.  I took out $7,000 from my RRSP from the bonds portion for living expense in 2019.  We also took out the cash that accumulated in both my TFSA and my wife’s TFSA accounts.

Oddly enough, while all of this made me nervous I still managed to enjoy my holidays and focus on spending time with family and friends.  Sometimes you just have to ignore the ugly stuff to remember what in life is important (hint it isn’t the money).  The reality is I still don’t have to run out and go back to full time right away.  We still have a lot of money invested and we aren’t going to go broke anytime soon.

The good news is 2019 should start to turn things around.  Why?  Well first off the markets as I write this have already improved from that dip at the end of 2018.  Also we expect a substantial increase to our Child Tax Benefit starting in July which should improve our non-investment cash flow for the year.  I’m also going to make an effort to make some more income this year from writing and side jobs (which I was planning to do even before the markets went to hell but it is just more important to do it now).

Any questions?

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Nov 2018 – Net Worth

Welcome to my net worth posts where I try to prove to myself and you that I wasn’t crazy for leaving work in the fall of 2017 to start my early retirement.   A few important notes:  we are mortgage free and our goal is have our income/investment gains exceed our spending by 102% on a 12 month rolling average (the extra 2% is a buffer for inflation).

Investments

Accounts

RRSP $64,000
LIRA $17,300
TFSA $94,840
Pension $171,220
Wife’s RRSP $91,390
Wife’s TFSA $85,380
Wife’s Taxable $42,800
High Interest Savings Account $29,290

Investment Net Worth $596,220 ($6100 increase over last month from investments)

Home Equity

Estimate $395,000

Income

To keep things simple I’m only going to track what income comes into our main ‘house’ chequing account.  I won’t be tracking my wife’s or my businesses income as those don’t really matter until the money moves over to the ‘house’ account.  Also I won’t track investment gains since that is covered above.

  • Wife’s Monthly Payment to House: $550
  • Child Tax: $340
  • Interest $28
  • Total Income: $918

Spending

Last Month $2942

This included $1024 for dental work (mostly cleanings) and we started our Christmas shopping ($610).  So other than those two item not a bad month.

Results

Net Worth ~$991,220

This Month Investment Gains & Income/Spending Ratio = (6100+918)/2942 = 2.39 (Target 1.02 or higher)

Dec 2017 to Nov 2018 Invest Gain & Income/Spending Ratio = (-27588+16507)/33428 =-0.33 (Target 1.02 or higher)

Commentary:

This month was slightly better after the disaster of Oct 2018 but I am still down overall for the last year with a negative ratio result which sort of sucks since I have to take out some cash right away for next year.

The other factor that kicks into play here is my ratio is based on a 12 month average so I just stripped out the results of Sept, Oct, Nov 2017 which were really good so that made the results look even worse.  If you put those back in the overall decrease in investments since I retired is only $3641.

I’m still not in needed to use a backup plan mode here so while it sucks it isn’t terminal to my retirement plan.

Any questions?

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A blog about early retirement and happiness