Life update and musings

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I am aware I haven’t blogged that much lately. Actually, I haven’t blogged much at all this year, with a total of 18 posts, including this one. I guess 2018 was a little bit complicated and full of changes for me. The first half was actually not that great.

CAR ACCIDENT AND INNER QUESTIONING 

In October 2017, I was involved in a minor car accident that resulted in whiplash and soft tissue injuries. Said injuries lingered for over 6 months. This period was difficult, both physically and mentally.

On top of this, I started resenting my full-time job like never before. The only silver lining with this accident is that it really put my current life into perspective. I realized I had been putting off a lot of items, and that it was no longer sustainable.

FIRST WAVE OF CHANGES

I also realized I wanted more out of my life. “More” however is still proving elusive to define. I am working on it. Career-wise, I narrowed a path down to 2 options that I am really interested in. To do so, I decided to obtain an MBA.

Subsequent to this, working full-time was no longer doable or sustainable. Initially, I had given my resignation. After further discussions with my boss, I decided to stay on a part-time basis.

To cope financially, I refinanced my mortgage and leveraged against my condo. I had personal savings as well, but leveraging gave me more options. I don’t regret doing it.

Since then, I have seen drastic improvements in my life, particularly health-wise. I am feeling much better. I am finally taking better care of myself and addressing issues.

There are still a few key aspects of my life that are not satisfying and that I need to spend time on. But, I don’t want to make any rash -or rush!- decisions.

More changes are coming to my life and 2019 has the potential to be a powerful year for me. I can’t wait!

THE FUTURE OF THE MONEY SAVVY BLOG

This leaves me with the future of this blog. To be honest, I am undecided at this stage. One of the things I want to do is definitely being more offline. Maintaining an online presence is exhausting, as well as time-consuming.

I don’t know when the next blog post will be. I simply have more important priorities to take care of at the moment.  I am totally fine with that. Thank you for reading my posts and visiting my blog over the years.

Why I don’t really blog about my own finances

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A lot of fellow PF bloggers share their most intimate financial details online. How much debt they have, their net worth, their spending, their income….you name it, it is out there.

While I did share my debt amount, and how I repaid for it, I chose not to share many details on my finances , and here is why.

privacy concerns

Once you share something online, regardless of what it is, there is no way to get it back. No matter how hard you try, it will stay online.

I am of the opinion people don’t need to know everything about my finances, whether they are complete strangers , friends or acquaintances.

unhealthy comparisons

Society in general, and the PF community in particular, is using net worth as a measure of self worth. The 2 are actually not related.

If you are not killing your monster debt in less than 2 years, something is inherently wrong with you! Or if you haven’t saved a million by the time you are 25 , you are bad with money. If you are bad with money, you are probably bad with other things as well.

Does the above sound familiar? I bet reading about it wasn’t really helpful. It may even have made you feel bad.

Our own story is unique. We all have different lives. Knowing so-and-so paid x amount of debt or saved x amount of money won’ really do anything for us, at an individual level.

not a financial planner or advisor

A lot of PF bloggers have lists and spreadsheets of all their investments on their blog. Some of them even talk about their “top stocks” or favorite ETFs. I previously mentioned the majority of PF bloggers have no formal qualifications or certifications in Financial Planning.

I won’t be one of these bloggers anytime soon. I believe there is a level of personal responsibility when advertising or promoting financial products to complete strangers you don’t know anything about.

Final word

My blog is to share my passion for personal finances, but not necessarily to share everything about my own personal finances or my life.

I consider my blog to be a peephole into my life, but definitely not the complete picture. There is so much more to me than the contents of my blog….but I choose to keep it offline.

Could your cosmetics be bad for you?

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Most people are concerned about their food intake. A lot is written and said about what we should be eating, what we should avoid, what is “good”, what is “bad” etc..etc…

But, what about the stuff we put on our bodies, namely moisturizer, soap, shampoo, make-up?

Because it is for sale doesn’t necessary mean it is good for you or safe.

LOOSEY-GOOSEY REGULATIONS

Shocking? I know. In North America, regulations are minimal and losely enforced. I have lived here for 12 years and I have yet to hear about a beauty product being recalled because it was deemed unsafe.

Yet, a lot of cosmetics contain components that shouldn’t be in there in the first place. These components are well-known to cause allergies and act as hormone-disruptors.

I recently did a mass clean-up of my bathroom cabinets, after educating myself about some dangers of our everyday cosmetics. Here are some tips.

LESS IS MORE

Cosmetics companies are very good at convincing us we “need” one product for each part of our bodies. We “need” day-cream, night-cream, lip balm, make-up remover, hand-cream, foot-cream, body lotion, eye-cream, neck-cream….the list is endless.

This is simply not true. Using too many products will be ineffective and will result in an “overload” on your skin. It will also increase the risk of allergic reaction. Not to mention the strain on your bank account.

You can replace all of the above by coconut oil, which is 100% natural and way cheaper. Both your skin and your wallet will thank you.

THE FEWER INGREDIENTS THE BETTER

Have you noticed the sheer number of ingredients on many beauty products? The more ingredients, the more processed the product is. Chances it contains “scary stuff” that shouldn’t go anywhere near your skin.

It is also best to choose a product that does not have an extended shelf-life, ideally it should be between 6 months and 1 year.

INGREDIENTS TO AVOID

Unless you are a chemist, the list of ingredients in your beauty products most likely sounds like a foreign language to you. Here is what to avoid:

  • BHT & BHA: hormone-disruptors; possible carcinogens. Banned in Europe, not in Canada.
  • DEA ingredients: allergens
  • Phthalates: whether as a single word or chain ones. Hormonal disruptors; potential cause of birth defects.
  • Formaldehyde: allergen; carcinogen
  • Parabens: whether as a single word or chain words. Hormone- disruptors.
  • Fragrance/Parfum: companies are not required to disclose the composition of fragrance/parfum. Allergen. Possible hormonal disruptors.
  • PEGs: carcinogen
  • Petrolatum (petroleum): Allergen; carcinogen
  • Siloxanes: hormonal disruptors
  • Triclosan and triclocarban: these are like pesticides. Yikes! Disrupt thyroid function.

If you want to use safe cosmetics – I bet you do!-, you can check EWG Skin Deep.

My health is my most precious asset

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I have had some health issues lately, requiring quick action on my part. It also put things in perspective, and not just heatlh-wise.

OUR HEALTH LARGELY DETERMINES HOW WE LIVE OUR LIVES

When we are not doing well, whether on a temporary or chronic basis, there are many things we cannot or no longer can do. Physical ailments can impact our mind and conversely.

It may cause us to move-out of our home, relocate, be bedridden, switch to part-time work or quit our job altogether.

OUR HEALTH IMPACTS OUR PERSONAL FINANCES

Medical treatments are costly, and more so if they are not covered by public or private healthcare providers.

Our capacity to earn income is our best insurance for both our present and future. Disability insurances are not nearly adequate to provide any real financial safety.

THERE IS NO PRICE TAG ON HEALTH

The personal finance community is obsessed with net worth, savings, stocks, bonds, ETFs and mutual funds.

Health cannot be quantified or bought on the stock-exchange.

Health is priceless.

My health is my most precious asset, and I will strive to keep it that way for as long as possible.

Can money buy happiness?

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Back in 2010, the University of Princeton published a study on how people making $ 75 000 per year were reportedly happier than those earning less than this amount.  A lot of media outlets and people immediately jumped to the conclusion that money buys happiness.

Well, I kind of disagree with this statement…no point in writing a post otherwise!

you can’t buy happiness at the supermarket

Happiness is not a tangible product. It is not something you can see or touch. There are lots of variables when it comes to happiness.

If you ask 10 people what their definition of happiness is, I bet you will receive 10 different answers.

Before haters jump all over me, let me tell you about my personal story a little bit.

I actually grew-up poor. My parents were considered as low-income class. They didn’t have any money besides to pay for their bills, and even that was difficult at times. My parents were also terrible with managing the little they had.

They had no long-term vision or planning skills. Saving was a foreign concept to them. Growing-up I certainly did not wear designer clothes or vacationed in exotic, far-away places, unlike some of my friends and classmates.

YES, the lack of money can be a source of stress…

So yes, the lack of money was stressful and bothersome in my family. But it is actually not what made me unhappy at times. For the most part, I would say I was happy growing-up. What actually made me unhappy had absolutely nothing to do with money.  I will stop there with my childhood memories. There are many things I do not wish to share online.

…but having money does not automatically equate happiness either

Fast forward a few decades later, I reached that $75K mark. I didn’t necessarily feel happier to a greater extent, although it sure was nice to be able to save for retirement, pay for my bills and vacation in exotic, far-away places.

Except that, for me to be fully happy, I needed something else. Something that has nothing to do with money, and that money actually cannot buy.

Recently, I decided to switch to part-time work. Working full-time was simply no longer sustainable for me. Doing so means a huge pay-cut and possible depletion of my savings. Guess what? I am happier now than when I was earning a full income.

attempting to define happiness

As mentioned above, everyone’s definition of happiness is different. I personally like the definition offered by Happiness International:

Happiness is when your life fulfills your needs“.

Money is not the only need we have; not all our needs require money either.

FINAL WORD

It is probably more accurate to say that money can contribute to happiness to a certain extent. The Princeton study that started this post also revealed that people earning more than $75 000 per year did not report increased levels of happiness…..

That time I decided to work part-time

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As I previously wrote, a few things have changed in my life recently.

I became consumer-debt free, decided to obtain an MBA and recently switched to part-time work.

BUT, WHY DID YOU DO THAT?!

You might ask. Well, studying for an MBA is not the same as studying for a certificate or a diploma. A lot more reading and researching is involved, and it is definitely more challenging.

But it is not the only reason.

i desperately needed better work-life balance 

Working full-time was sucking all my time and energy. For the last 2 years, I would leave my home at 7.00 am and would never be back before 5.00 pm, from Monday to Friday. I was constantly tired and had not much energy for anything else during the week.

I was only living for the week-ends and vacation. A lot of personal matters were put on the back burner and my health also suffered. This is simply no way to live. I started resenting my job.

Other issues within my workplace made me resent my job even more. I reached my breaking point in February.

I FINANCIALLY PLANNED FOR THE TRANSITION

Although I was at my breaking point, I decided not to hastily quit my job. Been there, done that!

While I was paying off my consumer-debt, I also saved money. It was equally important for me to also have some serious savings. My full-time income allowed me to do so.

It definitely took me more time to get rid of my debt, but I also built a nice cash cushion that could allow me to remain without any income whatsoever for several months.

If I made any type of income, I would be able to work part-time for about 18 months with said cash cushion.

If I had kept working full-time, said cash cushion would have paid for my MBA. But I switched to part-time, so it is a moot point.

i waited for the last car payment to go through

I wanted to become consumer-debt free with my income rather than dipping into my savings.

i refinanced my mortgage

Since I had decided I would work part-time, I had to figure-out the tuition payment. I did not qualify for student loans, but I actually didn’t want to take any. I also did not want to do a line of credit or another personal loan.

So, I refinanced my mortgage and slightly leveraged against the equity of my condo.

By doing so, I only have one monthly payment to take care of. A portion of said payment is also going right back to the equity in my condo.

Most importantly, I can afford to pay for my MBA and to work part-time for the next 2.5 years.

final word

I have been working part-time for a month now and am already reaping the benefits. I have more energy and feel  more positive. My health is improving as well.

 

When Financial literacy is not enough

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A lot is being written about Financial literacy. In its basic definition, Financial literacy is is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.

There has been a lot of lamentations over the fact Financial literacy is not taught at schools. Although things are starting to change on that front, and I totally agree with the importance of this subject, I believe Financial literacy alone is not enough.

Let me elaborate a bit.

YOU NEED SOME MONEY TO APPLY FINANCIAL LITERACY CONCEPTS

Yep, that’s brutal and cynical but it is the (hard) truth.

You initially don’t need money to learn about Financial literacy, but you do in order to implement what you learned. For example, debt repayment and investing are 2 pillars of Financial literacy.

If you don’t have any -or enough-money to pay off your debt or to start investing, you won’t go very far with your personal Financial plan. The money conundrum needs to be sorted out first.

YOU NEED TO ADDRESS YOUR PERSONAL BELIEFS ABOUT MONEY

So you think your Financial decisions all come from a rational, logical, cold place? Think again!

A lot of our decisions come from deeply-ingrained beliefs we all have about money….as well as other aspects of our lives and ourselves. Some beliefs can be very limiting and hold us back.

Behavioral Finance is a relatively new subject field that studies the psychology behind financial decision-making. We all can learn a lot from this. Some common beliefs around money can trigger overconfidence, avoidance or inertia.

If you want different results with your money, look at the belief system behind what you are doing and how you are feeling. This can work in other aspects of your life, by the way.

The first step is to identify the belief and accept it. Then you can figure-out how to change it, if it is a possibility.

CONSISTENCY IS KEY

In order to be successful, you need to consistently apply the Financial literacy principles you learned as well as addressing your beliefs in an equally consistent manner.

This is where most people fall off the wagon. It can take time to change deeply-ingrained beliefs. Relapses are to be expected. If money is lacking, you may think it is pointless to apply these principles. Please, don’t do this!

Consistency and perseverance is what will yield results.

final word

I look at Financial literacy as being one leg of the “Financial chair”. If you are missing the 3 other ones -money, beliefs and consistency-, the chair will be, at best, shaky.

Financial literacy is a good start. But it simply is not enough.

 

F.I.R.E. explained and debunked

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F.I.R.E. is a very popular acronym is the Personal Finance blogosphere. It stands for Financially Independent Retire Early. Over the years, this concept has become more and more appealing, and no wonder. With major changes in the workplace, such as stagnant wages, the disappearence of pension plans and a higher unemployment rate, a growing number of people aspires to quit the grind….myself included.

F.I.R.E. IS NOT A GET-RICH-QUICKLY SCHEME

Unfortunately, it will take some time before anyone is in a position of pulling the plug on their dreaded job, as a sufficient amount of money needs to be saved first.

Said amount will require thorough calculations first. Conventional wisdom says it should be 1 million or 25 times your yearly expenses. I say conventional wisdom needs to be challenged! I will save this for another post.

In order to save for the magic number, you need to make money, there is simply no way around this!

F.I.R.E. HAS AN ELEMENT OF PRIVILEGE IN IT

When you take a look at F.I.R.E. bloggers, most of them were making a decent income – well into the 6 figures, combined or not- before becoming financially independent (F.I.) . Some of them don’t have children or had them long after being F.I. Others chose not to buy properties or graduated with no student debt or had no debt at all.

The above definitely gives a head-start to anyone choosing F.I.R.E. It doesn’t mean you can’t achieve F.I.R.E. if the above-mentioned doesn’t apply to you. However, it may be more challenging and take longer.

The harsh truth is that F.I.R.E. will remain a dream for a lot of people.

F.I.R.E. HAS AN ELEMENT OF FRUGALITY IN IT

In order to achieve F.I.R.E., you not only need to earn money, but also to cut down on expenses.

By doing so, you may realize you need less than you initially thought to live on.

Being frugal can be borderline with being cheap at times.

Frugality is not for everyone either. That being said, not being frugal does not prevent anyone from reaching F.I.R.E. either. It will just take longer.

F.I.R.E. IS MORE ABOUT FINANCIAL INDEPENDENCE THAN EARLY RETIREMENT

A lot of people achieving Financial Independence actually do not retire or stop working. They choose to pursue different career paths instead, the most popular being becoming a writer and/or a blogger.

This is where the problem lies, in my not-so humble opinion. A lot of people blogs about retiring early and never working again, when they are actually still earning income instead of drawing from their savings!

The core concept is that F.I.R.E. gives you the ability to choose when and where to work as well as what to work on. Money is no longer part of the equation. This is what I personally find really attractive.

FINAL WORDS

I would love to reach Financial Independence sooner than later. That being said, I don’t know if it is a possibility right now, and it is OK. I fully acknowledge my economic reality and the limitations of the F.I.R.E. concept.

I would also caution anyone not to take at face-value anything read on the Internet from people claiming to be F.I.R.E. We never have the “full picture” of their situations. We don’t have access to their bank accounts, investment portfolio or tax returns. We can never be sure where their income comes from.

 

 

Thoughts on the financially privileged & the not so privileged

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I don’t necessarily think there is anything inherently  wrong with growing-up in financial privilege. When I was younger I actually wished many times for my own upbringing to be different. Unfortunately, it wasn’t to be.

My parents had -and still have- horrendous money management skills. On top of that, my dad did not believe in the concept of keeping a job, which created further issues. Issues that impacted me both directly and indirectly. But I digress a little here.

being financially privileged can definitely propel you ahead…

There is no question money can open a world of opportunities, in many, many ways: education, business, travel etc…It also takes a lot of worries away.

That being said, now that I am a little bit older and perhaps, a little bit wiser, I don’t envy people who grew up financially privileged.

…but it can also make you lazy and unappreciative

I have seen this countless times with friends whose parents and grandparents had more money than mine.

The friends in question tended to take everything for granted and had no real appreciation for what they had.

I had very little financial resources growing-up, and even as a young adult. I definitely appreciate everything I have and don’t take it for granted.

privilege can take away the sense of accomplishment

Growing-up poor makes me want to get out of poverty, and fast. I worked very hard for everything I have accomplished so far, and I am proud of this.

One of my childhood friends had absolutely no motivation or drive to do anything, because he was lulled by too much family money.

And where is the sense of accomplishment and pride when you never have to work for anything or figure anything out by yourself?

When money is scarce, you become resourceful and creative. You make do.

PRIVILEGED PEOPLE USUALLY can’t handle the slightest discomfort

Life is a bitch at times. Privileged friends and acquaintances of mine have the most difficulties handling any temporary discomfort of curve balls thrown at them. I recall another childhood friend of mine having a panic attack at the airport because her flight had been cancelled! I kid you not.

When money is scarce, you also develop resilience and adaptation. You don’t sweat over the small, insignificant stuff. You learn to prioritize very quickly.

FINAL WORD

With a little perspective, I now see how growing-up in a poor environment gave me great qualities, that have been very useful to me, such as determination, adaptation and resourcefulness.

Maybe I am bashing on privileged people. Maybe not. My point is more that there is a silver lining when you are underprivileged, financially. If you are lucky to be financially privileged, appreciate it and do something meaningful with your life.

The problem with personal finance blogs

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I totally understand the post you are about to read may confuse you, and even more so since I am a personal finance blogger who has been blogging about personal finances for over 3 years.

That being said, I believe it is also important to have perspective.

PF blogs are either too generic or too specific

A lot of blogs out there are either about extreme frugality, early retirement, stock investing or becoming debt-free. If you don’t fit in any of these categories, it is hard to relate to these blogs and the bloggers behind them.

Same goes with geographic location. A lot of blogs are written by US residents. Well, I live in Canada so that does not necessarily help me.

It is one of the reasons most people create their own blogs in the first place. I was no exception.

most pf blogs are written by non-specialists

This is a highly sensitive area I am coming to. The majority of people blogging about personal finances have no background in it whatsoever. Quite a few are writers trying to cash in on the popularity of the subject.

Writing is also influenced by personal experience. Bloggers are sharing tips and advice because it worked for them. By extension, it should work for everybody else, right? Wrong!

In order to work, financial advice has to be personalized. You don’t get this in PF blogs. It is crucial for readers to always check facts and not take the advice too literally.

PF blogs are repetitive

How many times have you read that you need to save money for retirement or have a budget?

Don’t get me wrong, basic financial advice is and will always be needed. It is a foundation to build on. But we also need different takes and perspectives in order to progress.

So, that what my blog will be aiming to do from now on. Readers will still see basic advice from time to time, as it allows for a broader audience. But, there is some conventional wisdom that can and needs to be challenged.