Planning for my departure

Stumbling upon articles documenting the trials and tribulations of women my age reminds me of how incredibly lucky I’ve been. Certainly, hard work and sacrifice have factored into my career progression, but it would be impossible to discount the role that luck has played. Graduating pharmacy school during a massive pharmacist shortage and beginning my investing career in 2009 when markets presented tremendous value, has provided a huge boost. I was able to land my first “grown-up” job at 24, and not 32 and I’ve never had to dance burlesque to make ends meet. Even Garth Turner spoke succinctly of the lack of savings among many in my demographic: “The liquid assets among 35-year-olds who have been working for seven or eight years is breathtaking. There aren’t any. Instead, all the cash has gone into lifestyle, a soul-sucking condo or repaying student debt.”

The financial head start that I have is of particular importance these days, when I find myself uncertain of my future. Layoffs and prolonged unemployment are quickly becoming the norm in my field. Even those of us who have jobs struggle to keep them in hectic, short-staffed environments and are forced to meet outlandish quotas designed to maximize corporate profits. My own body, often the first harbinger of my cognitive dissonance has displayed increasing weariness. On my days off, I am often up before 6am, excited to get a jump on my day. I exercise, read anything I can get my hands on, watch documentaries, catch up with friends and spend time with my mom. On the days I’m working, I’m sluggish and uninspired. I drag myself out of bed and down stimulants to provide the energy to head out the door. Stumbling upon this book has reminded me that you may be able to put up with a sh*tty job for a while, but not forever. Eventually, your desire to self-actualize and / or inability to tolerate anymore BS will push you out.

Be it my immigrant work ethic or my parents’ propensity to disown me, but I can’t just walk out on a job without an sufficient safety net.  So here’s what I’m thinking:

My next payday is September 1st, which happens to be my rent cheque cashing day. The financial boost will allow me to make another lump sum mortgage pre-payment ($10k), bringing my total mortgage debt obligation to 250k (on 3 properties). Given the average interest rate of 2.04%, I’ll then let the mortgages run their full course as they are tax deductible and at a rate approximating inflation. The other point worth mentioning is that my rentals are worth $1.25MM according to MPAC. Not that I plan to sell, but having $1 million in equity is a nice safety blanket. Based on current projections, I can reasonably expect about $30k per year in rental income, increasing gradually as the mortgages are paid off.  Next, my investments are worth approximately $550k today. I’ve been very inconsistent with my investment allocation / tracking / re-balancing so this will be my next order of business. Using FIRECalc’s 4% withdrawal rate, I can expect to withdraw $22k per year today without depleting my capital. With my rental mortgages on autopilot, I can redirect any monthly surplus to my investments. I’ll continue maxing contributions to my employers pension plan (15-18k per year in forced savings) but redirect any excess to my unregistered investment accounts.

I’m not sure if anyone ever feels fully ready to escape the daily work grind, but at least I’m giving it my best shot.

House Hunting: Part I

An interesting dichotomy seems to exist in the Canadian economy today.  While Canada (mainly Ontario) lost 31,000 jobs in July, the real estate market soared some 20% to record setting levels.  So luckily, we no longer need jobs since our houses are earning us $150k/year as we live in them!  And it’s a good thing too, because the job market is pitiful. One might expect that as a health care professional, I’d be able to avoid the job market gloom… but you’d be mistaken.  Check out a locum pharmacist listing I stumbled across:

Shoppers Drug Mart::

Location: Etobicoke/Mississauga, ON*

Dates and Times:  August 6 (3pm-10pm)

Technician: Leaves at 6pm

Software: Healthwatch

Methadone: No

Rate:  $31/hr not incorporated and $33/hr for fully incorporated

*Ontario: where dreams and high paying jobs go to die

Now, I work on the Mississauga/Etobicoke border and earn about $50 per hour.  This figure is not inclusive of my health, dental, drug, or vacation benefits, nor my 6% pension match.  So if I were a new grad looking for work today, I’d be expected to earn 60% of my current wage, live without benefits and accept a measly 7 hour shift on a Saturday night.  Not to mention, I’d have to get into a bidding war for dilapidated, post-war Etobicoke bungalow or an overpriced shoebox condo overlooking a highway.   So, in summation, no thank you.  My employer, however, is likely salivating at the thought of a new flock of heavily indebted recent grads with student loans, leased luxury cars and exorbitant mortgages, willing to work sans-benefits for $31 per hour.  I know that my job is hardly secure, which is why I’m using my contrarian nature to prepare for the inevitable day of reckoning.

By using the lowest interest rates in history to gorge on residential real estate, Canadian households are now the most indebted of the G7. In Ontario, our Liberal government has bungled their way to a debt-to-GDP ratio above 40%, trumping basket case California in their heyday.  Eventually, interest rates will creep upwards and public & private debt levels will limit future consumption and lead us into a recession.  The whole house of cards would have collapsed long ago if not for government goosing the sector by allowing CMHC to backstop loans for poor people and banks offering sub-inflation mortgage rates.

The rational part of my brain is painfully aware of the Great Canadian Housing Bubble.  So why then, am I spending my Sunday afternoon hitting up open houses?   ¯\_(ツ)_/¯ More on this later…

Scaling Back

This coming September marks my 7th year as a pharmacist. Since getting my full fledged pharmacy license in September 2009, I have pretty much worked non-stop. In fact, I look back in equal parts shock and horror at my Google Calendar from those early work years:

image

One whole day off in June 2010…what a slacker

I was living in the middle of nowhere and working a fulltime job for one company, while simultaneously working the equivalent of a fulltime job in locum shifts. I essentially spent my mid to late twenties working, sleeping and driving between the aforementioned. I eschewed romantic relationships, maintained only superficial ties with a handful of friends and scheduled time to see my family when I had a rare day off. Working in a small town kept me off the hedonic treadmill. I lived in a $590/month 1-bedroom apartment located catty corner from a strip club and drove a 9 year old Honda CR-V I’d inherited. This was fine though, as ostentatious displays of wealth felt especially gauche given the financial turmoil at that time. And quite frankly, when you live in a town with a population of 22,000 where the Swiss Chalet is considered fine dining, you really have no choice but to save your salary.

Once I’d saved a respectable amount of money, I spoke to one of my former pharmacy school classmates about how to begin investing. My friend Eric was the only person I knew with a brokerage account and I figured I could recruit him to be my money manager. I was intimidated by the world of investing, which up until that point I’d associated with Bay Street guys in expensive suits and BNN shows that went over my head. Eric could have charged me a percent or two and allocated my money for me, but instead he gave me the best piece of financial advice I could have asked for. He said “No one will ever care about your money as much as you do, so learn to manage it yourself.” I knew he was right, and I quickly became a voracious reader of personal finance books and blogs. I watched Peter Schiff’s YouTube videos and read Garth Turner’s blog and idolized guys like Gerald Celente and Max Keiser (I know I’m more than a little weird).

Once I’d been investing for some time, I became accustomed to seeing the balances of my accounts tick higher. The rising stock market tide from 2009 onward was raising all ships, mine included. Fearful of a market pullback, I diversified into real estate, renting out the properties I’d purchased while I continued to live in my strip club adjacent abode. My ridiculous schedule caught up with me at times. At various times, I’d work myself to the brink of emotional and physical exhaustion and be under medical orders to take time off. Being goal oriented and having the material needs of a hobo, I identified with financial independence blogs that discussed earning enough passive income to not have to work for money. Reaching financial independence became the ultimate life goal.

Looking back now, I’m not as filled with regret as one might expect. Sure, I went without drunken nights out, passive aggressive frenemies and random hookups in my 20s. Instead, I met tons of people who’d lived lives dramatically different from mine. I gave flu shots to Mennonites and dispensed methadone to addicts and checked IV bags for NPO patients. I made countless blister packs for nursing homes and mixed thousands of antibiotic suspensions for kids with upper respiratory tract infections and locumed at pharmacies that would not have been able to open without me there. I did well by doing good, which I think is the best any of us can hope for. Somewhere along the line, my investments began producing enough passive income to sustain my lifestyle. So I’d technically reached my goal, but faced with the prospect of leaving the workforce, I wavered.

I like my job now and working isn’t so crummy when you have a normal schedule. These days, I find my focus has shifted from work and money to more leisurely pursuits. So starting this month, I’m working far fewer hours.  I’ve not yet elucidated what my new life goals will be, but I’m hoping my newly lightened work schedule will allow me to uncover them.