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The Start of My Financial Independence Journey After Divorce

  • May 14, 2019
  • By simplycloverliving
The Start of My Financial Independence Journey After Divorce

My Story

I have briefly described my marital status on my “About Me” page. But for those of you who don’t know, my marriage dissolved when I was 30. I used to be very spendy and loved pretty shiny things (Ok, I am still like that, but I am more intentional about my purchases now). Since my ex husband was working in the financial sector, I relied heavily on him for anything money related.

Since then, I have travelled extensively, not being intentional whatsoever with my spending. As I write this, it makes me cringe to look back at what a frivolous spender I was.

The Lesson

The divorce was a shock to my system. The scariest thing was to develop independence, especially around money. Over-reliance on my previous relationship left me feeling powerless and stressed about my future. This is when I realize how important it is to take control of my own finances.

As a woman, I believe it is important to understand how to handle your money, which puts you in the driver’s seat in case anything goes South. This experience taught me that nothing is ever guaranteed. It is always good to have that self-care skill in the back of your toolbox, whether you choose to use it or not. That way, you are more immune to bullshit and gain more respect.

However, it really took me some time to let that lesson sink in. I didn’t really optimize my finances until a year ago. It took my mortgage interest rate going up for renewal, and my travelling spending becoming unsustainable for me to kick me in the butt and do something about it. Since the travel bug has bitten me so badly that I had to find a solution that would satisfy both my travel cravings and still let me responsibly grow my money for retirement. That’s why I sold my condo to rent a room. Click here to read the article for an in-depth explanation. That’s also when I was introduced to the couple at Millennial Revolution.

Fan girling with the Millennial Revolution at Chautauqua (Greece October 2018)

My Plan

Since discovering Millennial revolution, it has opened my eyes for the world of Financial Independence. After learning the skill of “Mathing Shit Up”, it made me realize it is possible to build a 7 figure portfolio within 10-15 years, single-handedly, with my current income, and still allow me to travel 4-5 times a year! I am extremely fortunate to have a defined benefit pension with my company as well, so that will help!

How Does Financial Independence Work?

To reach financial independence, it means saving enough money to create a perpetual money making machine. The most common forms of investments are in stocks and bonds, business income, or rental income. When that portfolio is large enough for it to generate enough passive income to cover your everyday expenses, voila, you are financially independent and out of the rat race! Now you are free to do what you want without worrying about money, well of course, only if you stay within your annual budget.

To get there, you want to increase your saving rate and figure out your everyday expenses. Mr. Money Mustache’s article on the shockingly simple math behind early retirement, shows how this works. Click here to see his article and chart that shows how long it takes to retire based on your saving rate. Granted, this is assuming you have no initial capital to start with. If you do, you accelerate your years to retirement, like it is in my case.

My Steps to Financial Independence

1. Build and stick to a budget using YNAB, which allows me to save 40% of my income.

  • The most useful feature: shows remaining balance for each spending category.
  • Cost an annual fee, but I think it’s more than worth it.
  • Eg. $30 left for the weekly food category, and you’ve only got 3 days left? No more eating out! Spent too much on clothes, but you got money in the entertainment category, swap it out!
  • This method allows me to adjust my spending month to month and forces me to think twice when I make a purchase.

2. Invest in Index Funds

  • What are index funds?
    • They are stocks and bonds that mimics the performance of the market index, such as S&P 500 (among others), which consists of the top 500 large cap companies in the U.S., including the biggest names such as Apple, Netflix, Tripadvisor, etc.
    • For the past 90 years, the S&P 500 has returned an average annual rate of 10%.
    • It is self cleansing to make sure the best performing 500 companies stay in the index, and kick out the ones who no longer make the cut.
    • If you DIY, it has low management fee (<0.25%), you keep more of your money
  •  Why is low management fees so important?
    • It can eat away a huge portion of your retirement portfolio, as much as 25% if you have a 1% fee and invested for 40 years. (based on $25,000 initial investment, $10,000 annual contribution)*
    • Most banks sell you actively managed funds which takes north of 2% fees. You are paying them to hand pick stocks and bonds. But as research shows, very rarely does anybody outperform the market. Essentially, you are paying astronomical fees and subpar performance.
    • It is more diversified because it is invested into all the big names, across industries and globally, depending on your asset allocation
  •  What is asset allocation?
    • It is how you divide up the portions in stocks and bonds. Most of the time, they work in inverse relationships. When stocks go up, bonds go down, and vice versa. Stocks usually have growth but more volatile, meanwhile, bonds are usually safer. Therefore, you pick a mixture of both to safeguard your investments.
    • Depends on your risk tolerance, you pick what % of each asset (stocks or bonds) you would like in your portfolio.
    • You also pick what countries you want to be exposed to and their proportions in your portfolio.
    • Millennial revolution has a handy chart that shows you how to pick your asset allocation here.
  • What are my investments?
    • I chose this form of investment because of the convenience. Being a landlord might work but the hassle it comes with is not aligned with my travelling lifestyle and personality at the moment.
    • The proceeds of my condo are currently invested into index funds, supervised by a fiduciary financial advisor that takes a 1% fee. I was too scared to DIY at the beginning and wanted someone to take me by the hand for such a big investment.
    • I am in the process of moving my funds to Questrade and DIY to lower the fees.
    • Debating if I should go 100% Equity since I have a defined benefit pension.
    • Target for $1 million in 13 years, based on a 6% annual gain.
    • Referring to The Canadian Couch Potato Method to investing. It tells you exactly what funds to buy.
    • Referring to Millennial Revolution Step by Step Investment Workshop.

3. Being More Intentional

  • I am renting a smaller room now to free up my resources to travel. However, I would eventually rent or maybe buy my own place (if the math makes sense) down the road, and adjust my discretionary travel spending. But for now, priorities! You know what mine is!
  • I am learning to be more minimalistic and buy quality products that last. It will also free up mental stress when moving from place to place, and being more environmentally friendly.
  • Does my purchases spark joy for me? (Marie Kondo style :p)

Trying to cook more!

4. Travel Hack

  • It is a method to use credit cards on everyday purchases to accumulate points. It is mostly advertised to use on airline tickets, but it can also be used for hotels or any travel related costs (depending on the card you get).
  • Since my flight benefits are pretty much equivalent to travel hacking, I thought I didn’t really need to use this trick. But I realized now that I can always use some points for hotels or redemption for any travel related expenses! More money savings, the better!
  • Therefore, I started travel hacking mainly using the Prince of Travel website for information.

Here are the few simple steps to get me started! I am a complete rookie in this whole financial independence community, but I think I am heading in the right direction!

Yay! Celebrating the journey to wealth (in adventure, health and freedom)

What Financial Independence Means to Me

Since learning more about personal finance, I feel empowered and confident that I can take care of myself. It forces me to evaluate what is important to me, which I have since allocate the time and resources to experiences that make me happy, not what society tells me what would make me happy. Pop culture and keeping up with the Joneses can be damaging not only to our wallet but to our self worth. We don’t need to follow trends to be validated. The whole self love lesson is another journey I embarked on which I will talk about in another post.

When I reach financial independence, it gives me the power to have options. It means FREEDOM! I can continue to work or not. Maybe slow travel to different countries in the world and perhaps volunteer at a sloth sanctuary? That would be my dream!

Anyways, that’s it from me about financial independence. What do you think about this concept? Would you change your lifestyle to retire earlier? Comment below!

Check me out on my social media! That’s where I am most active.




*How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings
Disclaimer: All information is based on my own research. I am not a licensed financial professional. Proceed with caution for any investment you make.
By simplycloverliving, May 14, 2019
  • 11
  • FIRECracker
    May 14, 2019

    You go, woman! It was our pleasure to meet you at Chautauqua and I gotta say I was immediately impressed from the start!

    Keep hustling and continue being the superwoman that you are!

    • simplycloverliving
      May 14, 2019

      Awww thank you! It means so much coming from you! A badass yourself!

  • Gary
    May 14, 2019

    Hi Clover! Congratulations on your journey to FI, hoping to beat you there 😉 As an aside I should point out that being divorced and 30 makes you appear much more substantive and with it. After going through that you now know what this whole thing is all about. Good for you on hitting the ground running with this, it looks like you are on the right track. And yes I do think MR rocks too.

    Love your pics.
    Gary in London

    • simplycloverliving
      May 14, 2019

      Thank you Gary! Yes I hope you get to FI quick! I agree with you that the divorce has made me a stronger woman! I am actually really grateful it happened. I am going to write a post in the future about why my divorce was the best thing that happened to me! Thanks for reading!

  • Baby Boomer Super
    May 16, 2019

    Lovely blog, Clover! I’m excited to watch you grow it as you work toward your goals! Really enjoyed meeting you in Greece and hope to meet up again soon!

    • simplycloverliving
      May 16, 2019

      Thank you for reading Kathy! It was so lovely meeting you in Greece as well and I hope your blog will grow and reach more people too! The more we have on board, the better!

    • simplycloverliving
      May 17, 2019

      Thank you so much for reading Kathy! I love your blog too, and it’s so great you have one that targets boomers. Everyone in every niche needs to hear about FI. It was so lovely meeting you and Brett as well! Definitely hoping we could reunite one day!

  • WTK
    June 2, 2019

    Hi CLover,

    All the best in your FIRE journey. I believe that your past experiences will equip you better in your journey to FIRE. Hope that you could achieve it sooner than expected.

    Best Wishes.

    WTK from Singapore

    • simplycloverliving
      June 5, 2019

      Thank you for your support WTK! I hope I will get to FI soon!

  • ปั๊มไลค์
    June 10, 2020

    Like!! Great article post.Really thank you! Really Cool.

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About Me
Hi, I am Clover
I show the intimidated how to turn adventures into reality by exploring: - Adventurous Travel - Right Mindset - Financial Independence
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