Have you ever dreamed about quitting your job to travel the world?
That’s exactly what Kristy Shen and Bryce Leung did, after building a million-dollar investment portfolio and becoming Canada’s youngest retirees at just 31. Now, after three years of travelling non-stop, their portfolio is worth… $1.3 million. Yep, their net worth grew a whopping $300,000 while they were busy enjoying outdoor spas in Iceland and port wine gelato in Portugal.
But their lives weren’t always like this. They aren’t trust fund kids and they didn’t sell a start-up for millions. In fact, Kristy spent her childhood living in poverty, with her whole family living on 44 cents a day. Their new book, Quit Like A Millionaire: No Gimmicks, Luck or Trust Fund Required, chronicles Kristy’s life story as she went from poverty in China to middle class in Canada, to travelling the world full-time. They detail how they did it (Appendix B has a dollar-by-dollar breakdown if you’re a numbers nerd) and reveal how anyone can do the same.
Millennial Revolution
Since they retired, they’ve blogged about the FIRE movement (financial independence, retire early) at www.millennial-revolution.com and even have a full investing workshop series that shows you how to start investing from scratch – for free. Engineers by trade, they love to Math Sh*t Up in entertaining reader case studies.
Build wealth in three steps
As you read the book, you’ll realize there are three main steps to financial independence:
- Maximize your income
- Save as much as you can
- Invest the difference in a balanced & diversified portfolio of index funds (specifically, ETFs)
Kristy and Bryce show you how to do all three, in accessible language and with a sense of humour.
Maximizing your income
The more you earn, the more money you have to work with and put toward savings. Kristy talks about the importance of calculating the return on investment of a given degree (you may be surprised by how low the ROI is for medical school). Doing the math using publicly available data (tuition costs and average salaries), Kristy decided to become an engineer even though what she really wanted to do was become a writer. She chose the University of Waterloo (where she met Bryce) because its work-study program allowed her to earn money during her degree.
Kristy was driven to seek financial security before pursuing her dream of being a writer because, as a child, her dad instilled in her the concept of chi ku. (You’ll find out what that means in the book – you’ll also learn what the acronym CRAP stands for.) Now, just three years after she reached financial independence, we’re reading her book!
Renting over homeownership
Once they were married and had been working for a few years, Kristy and Bryce’s parents started asking when they’d buy a house. Going against the Chinese culture of homeownership above paper (digital) wealth, Kristy and Bryce chose to build a million-dollar portfolio over buying a million-dollar house. They give some of their reasons for choosing to rent instead of buy here.
There was probably no more space for it, but it’s too bad the Price-to-Rent ratio didn’t make it into the book. If you’re interested in doing the rent vs. buy math for your local real estate market, you can read that article.
While their stance on homeownership has attracted controversy from some corners of the internet, Kristy and Bryce maintain that you need to keep emotions out of your financial decisions and Math Sh*t Up instead.
Structuring your portfolio
In Quit Like a Millionaire, Kristy and Bryce share that they pay no tax – legally – and show you how you can lower your tax burden by putting the right investment assets into the right kind of account.
Importantly, you’ll also learn how to structure your portfolio at the start of your retirement to protect against the sequence of returns risk using what they call the Cash Cushion and Yield Shield.
Kids, insurance, and geoarbitrage
While Kristy and Bryce don’t have kids, they asked FIRE parents to share their experiences in the book. Quit Like a Millionaire also covers practicalities like buying travel and health insurance, and explains how you can use geoarbitrage to your advantage.
Tragically, the f***-over-ability index didn’t make it into the book but it’s an enlightening read on how managers track their employees’ financial situation and exploit it. Wherever you are in your career, the information in this book will enable you to confidently take responsibility for your financial future and protect yourself against the proverbial rainy day.
Summary
Quit Like a Millionaire is a funny, easily digestible how-to book on reaching financial independence. While two early retirees wrote the book, the information in it is applicable to anyone who wants to retire someday. Read the book, and then give copies to friends and family – they’ll thank you.
