Retired by 45. Retired to Hawaii. Living modestly. If you were to ask me who has had a significant financial impact or inspiration on my life, I wouldn’t tell you Warren Buffet, Oprah Winfrey or Marie Forleo. I’d tell you it was my dad.
When the folks at Personal Capital asked me who was a role model of independence, strength and financial stability in my life, my thoughts went straight to my dad. I mean, who wouldn’t want to retire at 45 and spend 6 months out of the year in Hawaii? It also got me thinking about whether I’m really the financial disaster I think I am (I’m not that bad), and where did the financial genes disappear to with me?
Did I reject the financial gene at birth? Is it there but just hiding behind my inane stubbornness? It’s likely the latter. I’ve always been stubborn with an extreme tenacious streak.
I’ve always been proud to tell others about my frugal dad. You see, my dad always kept his eye on the prize. His dream was simple – retire early to Hawaii. That’s it – there’s no yachts, fancy sports cars, membership to the most prestigious golf club or having millions in the bank for retirement. It was simply to retire in Hawaii and live modestly during retirement.
Did he YOLO his way through life? Certainly not. For starters, the term didn’t exist and second, he (or we), lived frugally. I learned many “MacGyver”, Miss Fix-It skills from him. My independence is owed to him.
What financial lessons did I actually learn and retain?
Well, I’ve retained almost all of them; it’s in their application where I fall short.
The first lesson was to start saving early. When I was 16, my dad took me to the bank and had me open an RRSP. Yep, at 16, I had an RRSP and was regularly contributing to it from my part-time jobs. Of course, my spending streak had me spending the rest of my paycheck.
At 16, when I got my drivers license, I had dreams of owning a brand spanking new car.
This was my first lesson in affordability. My father indulged me and said, “You go out and research how much that new car will cost and let me know what you find out.” So, off I went, researching the cost of the car, insurances, gas, maintenance, and the works. I had my eyes on a VW Golf, or a Chevy Cavalier Coupe. Boy, did I get an eye opener! The most shocking number was not just the cost of the car but the yearly insurance. The deal was if I could afford insurance, gas, and maintenance on my part time income, my dad would pay for the car. He must have been laughing and quite obviously knew what the result would be. A newly licensed driver at age 16 for a VW Golf was going to cost in excess of $4000 a year in car insurance. If I was lucky, I brought in $500 a month in part-time income; car insurance would eat up $333 of that. Ouch, lesson learned. I now knew why my dad always, always purchased used cars. My first car ended up being a used 1988 Plymouth Horizon, purchased for $600 from a neighbour.
My dad has never wavered in any of his financial decisions. He’s the epitome of financial strength and independence. Did he sacrifice things in life? You bet he did. But it paid off. In spades.
My parents have only ever had one mortgage, for their first home.
My dad has never had car payments – EVER. He even spent 6 months driving a car held together with duct tape until he could find a decent used car for his money.
Everything was within budget and usually paid for with cash.
There was never a throwaway mentality, if something broke, it would be fixed until no longer fixable.
So you see, I grew up around all the right financial influences but for some reason I turned into a hot financial mess. Which, by the way, is entirely fixable by yours truly and I continue to be a work in progress.
I’m grateful for the lessons that my dad has instilled over the years and although I haven’t put all of them into practice, sometimes lessons have to be learned on your own. Things have changed, I know what not to do and I choose to live simply, enjoy experiences in life not things, and to retire comfortably. Preferably to Hawaii.