Interview with Million Dollar Journey

Our next interview is with Frugal Trader from MillionDollarJourney. This newer blogger has been on a roll with some great posts and an aggressive goal to obtain a net worth of 1 million by the time he turns 35. I was lucky enough to get a hold of him to ask a few questions.

CD: First off I have to ask about your goal to get to a million dollars. You state in your 2007 goals that you want to get a 12 to 15% rate of return in 2007. Based on the fact that the average stock market rate of return is 10%, do you think can really beat the average for the next 8 years to make your goal at 35?

FT: Bold statements, I know. Most people say that it’s a fool’s dream to try and beat the market every year. However, you have to think big in order to achieve big. Looking forward, I think that 12-15% return on my savings is achievable through a combination of my stock and real estate portfolio.

CD: Ok, let’s say you keep betting the markets. To date you are doing a great job of building your net worth as you indicated in a December post that your net worth was at $198,500 and you were saving $1830/month. Even if you use your current net worth as the start point and keep the same savings rate at a 15% rate of return you would have $990,957 in 8 years. So that’s not giving you a lot room for error on your rate of return and/or savings rate. So do you still think your goal is reasonable and are you willing to adjust that goal as things change from the current plan?

FT: If things change from the current plan, loss of major income etc, then I’m definitely going to have to consider changing my $1 million dollar goal by 35. However, if things go as I plan, with our annual increases in salary and alternate income sources, I plan to increase our savings amount every year. All net passive income will go to savings. I also plan to increase our real estate holdings, which will also bulk up the net worth.

CD: I know you mentioned you don’t have any kids on your blog, but have you considered what impact having kids could have on your plan?

FT: From what I’ve been hearing from young parents is that kids aren’t that expensive until they get a bit older when they get into activities OR if they need daycare when they’re young. We’re fortunate that our parents live in the same city as us and they’d be more than happy to look after the kids while we’re at work. Another issue is when my wife takes maternity leave, that year will be tough as well as she brings in half of our income. However, if we maintain a frugal lifestyle and get our passive income sources up, I believe that we can maintain a high savings amount. We don’t have any kids yet and don’t plan to for the next year or two. So by the time we’re 35, they should be just about ready to start school and other activities.

CD: Well it looks like you’ve thought about your plan a fair amount, so when you reach your goal of a net worth of $1 million do you intend to retire?

FT: That is a great question. My goal for $1 million was never about retirement, it’s about financial independence. It is goal I have set for myself so that I will constantly learn about and improve my finances. In my opinion, by the time I’m 35, I don’t think that $1 million will be enough for my wife and I to retire on.

CD: Ok, so when you do you want to retire and what do you want to do in retirement?

FT: When I do retire, which will probably be in my 40’s, I plan to spend more quality time with my wife and future kids. I will most likely continue investing/trading and look for other ways to supplement my income without working for the man. I guess what I consider retirement is leaving the 8-4 office job, not necessarily stop working.

CD: Speaking of work, your blog is fairly new the blog sphere and many bloggers seem to burn out in a few months. What do you plan to do to help prevent/avoid this?

FT: I see my blog as a personal outlet for my personal finances. It helps me solidify some of my financial thoughts and ideas. I also enjoy the discussions that start from my readers based on my articles. As long as I stay motivated with my finances, I can’t see myself stopping my personal finance blog/diary.

CD: Great to hear your got some motivation, so how many hours do you spend blogging in a week?

FT: I admit, I’m a computer/web junkie. It started in my early teens and it has continued until now. When I was setting up the blog, I spent at least 3 hours / day on the blog. Now, it’s more maintenance and researching new ways to improve the blog. So, the past few weeks, I’ve probably dedicated around 1.5hrs / day which equates to 10.5hrs / week. If I could, I would blog all day long. Alas, I have a full time job that requires a bit of my attention. 🙂

CD: Well that was very enlightening for me Frugal Trader. Thanks for your time and I’ll be back with the third blogger interview tomorrow.

Interview with the Canadian Capitalist

The Canadian Capitalist has been around for over two years now and is considered to be one of the best objective personal finance blogs in Canada. I recently got a hold of this blogger to discuss his blog.

CD: Your blog has been mentioned in Moneysense magazine, the Toronto Star and the Globe and Mail and too many blog rolls to count. How does it feel to be a respected Canadian blogger on personal finance?

CC: It is a humbling experience. My blog is still small, so it is very nice to be recognized.

CD: A few of your readers have commented on the quality of your writing and suggested you should write for a magazine. Would you?

CC: I haven’t considered writing columns for magazines so far but maybe I should consider such a part-time gig.

CD: After reading your blog for about a year now I can’t help but notice how easy you make writing a blog entry every weekday. After trying to do the same for a few months now I’m starting to understand the work involved. So how much time do you spend a week working on your blog?

CC: I spend at least an hour each day on the blog, so my weekly commitment would be at least five hours. It also depends a bit of how easy it is to write. Sometimes thoughts just become words effortlessly and sometimes I stare at the blank screen for an hour and couldn’t put two sentences together. I also spend a bit more time reading books, newspapers, online columns and other blogs, but I would be doing this anyway, so it doesn’t count as blog work.

CD: Do you find maintaining a balance between your family/work/blog difficult with the time commitment involved?

CC: I don’t find maintaining the work/blog/family balance difficult at all. I typically spend an hour writing after the kids have fallen asleep. I do find it difficult that with two young boys, a blog and a two-career family, I have very little time for other activities.

CD: Do you feel that your are more educated after writing this blog for just over two years? Why?

CC: I feel that writing the blog has been a good learning experience. I love blogging because I have a dialogue with my readers and I have learnt a great deal from their comments. For example, one reader pointed out that I could avoid currency conversion charges with TD Waterhouse, which would help me and others avoid those pesky fees.

CD: Do you think your blog has made a difference in other people’s lives? Why?

CC: Surprisingly, I have to say that I am not sure that I have made much of a difference in my reader’s lives. Most, if not all of my readers are themselves financially savvy and they would do just fine even if my blog never existed. Perhaps, in the future, as more people read the blog, I would be able to make a bit of a difference.

CD: With over two years of posts what are some of your favorite ones?

CC: Diversify, Diversify, Diversify highlights the perils involved in over weighting a hot sector and In Every Little Bit Adds Up, I share a story on how small amounts saved can lead to a serious chunk of cash.

CD: Numerous bloggers start a blog than burnout or go inactive in a few months. What advice do you have to bloggers just starting out?

CC: One advice I can give bloggers who are just starting out is to write because they love to and not for any other reason, especially money. I also suspect that most bloggers who start out underestimate the time commitment needed to write even one post every day. In a few months time, as the effort required becomes clear, most people get discouraged and quit. I would also suggest trying out blogging on one of the free sites first to see if it is something they would like to do.

CD: An in closing I have to ask, so when do you want to retire early?

CC: I want to retire (in the sense that I don’t have to really work for a paycheck) in my mid-fifties. I am 33 now and though I am pretty sure that I will be retired in another 20 odd years, I am not sure that I can plan for such a long term. I figure that if I set short-term goals for the circumstances I am reasonably sure about, the long-term will take care of itself.

CD: Thanks for your time CC. Tune in tomorrow folks for another blogger interview.

Year End Check Up: Net Worth Update

With the end of the year approaching I think it is time to take a snap shot of my net worth and find out how I’m doing. In general practice, even if you do nothing else for the entire year of tracking your net worth it is useful to get an end/start of year snap shot of your financial health so you can track your progress at least yearly.

House $198,000 (I recently did a survey of house listings in the area, apparently my last estimate of $195, 000 is a bit low since a house with 500 sq ft less that mine is selling for $198,000.)
RRSP $11,600
Wife’s RRSP $4800
Old Work Pension $10,500 (I’m almost embrassed to say I forgot about this in my first net worth calculation)
Wife’s Investment Account $4200
ING Savings Account $1000

Mortgage $149,900
Line of Credit $0 (As I mentioned before, I keep this as part of my emergancy fund.)

Therefore my net worth now stands at: $80,200.

Even with my ‘lost’ pension money that is still a nice little increase from my first net worth check back in Nov. See you in the New Year.

A blog about early retirement and happiness