Findependence Day by Jonathan Chevreau
I just finished reading Jonathan Chevreau’s new book Findependence Day. I would highly recommend it to all just starting their working lives or newlywed/partnered couples. The story of this fictional young couple with their personal and financial struggles not only made very interesting reading, but it is the framework for a financial education for young people embarking on their life journey.
Chevreau repositions the objective from the traditional view of Retirement (stop working and start golfing) to Findependence (i.e. becoming financially independent and doing/working at what you want to do or perhaps your avocation becoming your vocation or reinventing yourself with a second career). Retirement/financial planning then becomes setting a date for financial independence and then generating a plan to get there by that date.
The decades long story of this young couple then becomes the context within which the reader is introduced to:
-paying off debts: credit cards, consumer, and mortgage- and then invest
-RRSPs, RESPs, TFSAs
-death benefit (life insurance) and living benefits (disability, critical illness, long-term care insurance)
-strategic and tactical asset allocation
-human and financial capital
-selling investment to pay down mortgage and borrow to invest
-real estate investing: REITs and bricks-and-mortar
-the problems with leverage and market timing
-value of a financial planner/advisor: not just a financial plan, asset allocation and implementation but also estate plan, insurance, tax issues, behavioral issues, rebalancing
-market risk as you approach retirement (or start of college for RESPs)
-asset dedication vs. asset allocation
-mutual funds (active management) and ETFs (passive index based investing)
-annuities: fixed and variable
-safe withdrawal rates in retirement
-pension plans: DB and DC
-“divorce is the biggest financial mistake”
You can set your Findependence goal to any age 50, 55 or 60 (so long as you have a plan to get you there) and it is not your retirement date; it is the day when you can declare financial independence. Findependence (the newly defined Retirement target) is not about doing nothing; it is about doing what you want to do.
Go out and buy the book for your children starting out in their adult life journey; a financial education embedded in a good story!