Introducing the Loonie IT Guy!

The first question you may be asking is "Who the hell is this Loonie IT Guy?"

Well, that's me.

The next question you may be asking is "Aren't all IT guys loony?"

Okay. Okay. I must admit, we do have quirks.

"Quirks? Who the hell spells loony with an -ie?"

Well, if you haven't figured it out already, I'm from a little known place called Canada. I was born in Toronto. You may have heard of our crack smoking mayor. He's in rehab now. Anyway, since I'm planning to write about my journey to early retirement, I figured a pun like loonie would be appropriate.*

My journey to financial independence started in March 2014. Not that long ago from the time I'm writing this. I was looking at our financial assets. When I say our, I mean Mrs. Loonie (who is far from nuts so I'll just call her wifey from now on) and me. It was disappointing to say the least. We were earning 1.8% on our high interest savings accounts, 1.35% on our chequing accounts, and we were essentially loaning another bank $1,500 interest free.

Crazy horse poop! We were earning paltry amounts in interest each month.

We had done pretty much everything right (we've both made our financial mistakes) up to that point. We were a dual income family that made decent money, we didn't spend everything we earned, we created monthly budgets, we put our money in Tax Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs), and we had an emergency fund of 6 months worth of expenses.

Normally, at this point, many people would go to their local bank and speak with a financial advisor about their investing options. I was wary of meeting with one. I just didn't trust them to have my back, so I turned to Google instead. I went to a few websites and read some articles. Most of the terms went over my head. I'm an IT guy, not a finance guy. Eventually, I stumbled upon the Personal Finance subreddit on Reddit. I've lurked on Reddit for a while. Sadly, that's the place IT guys like us go on a not so busy work day. I read some of the topics. Most of them applied to our neighbours down south. I stumbled upon a topic that oozed Canadian. A TFSA question. I eagerly clicked into the topic and looked at the question. It was a question about what to do with the money in their TFSA. Sweet! Exactly, what I was looking for. I browsed some of the comments. Fellow redditors pointed to the sidebar. Others redirected the OP to the Personal Finance Canada subreddit. I followed that link.

BAM!

First topic was a question about investing in the stock market with a TFSA!

What!? You can do that?

Seems the term Tax Free Savings Account is very misleading. I should know. I too was misled. You don't just have to use it as a savings account like the name implies. You can use it to buy GICs or use it to invest in stocks. Who ever came up with that name should have been reprimanded for not naming it better. Tax Free Savings Plan (to mirror the Registered Retirement Savings Plan or Registered Education Savings Plan) would have been better than Tax Free Savings Account.

Well... fruit!

Anyway, the OP was clueless with investing and didn't know the first place to start. The OP's situation mirrored mine as well. One of the top comments was to check out some books. One of them was The Wealthy Barber Returns. After a quick Google search and clicking on the Amazon.ca link, I realized something. I know this guy!

Okay. I don't know know him. But I've seen him on TV. Dragon's Den and Lang and O'Leary Exchange to be more specific. I remember seeing the CBC mention the book David Chilton wrote in a few of the episodes. It was a blurb really. A origin of sorts to explain why the hell this guy was on the show. To be honest, I always assumed he was the barber that is referenced in the title of his book. Guess I was wrong.

After a few days of searching, I got my hands on his book and read it cover to cover. When I was finished, all the finance terms and my understanding seemed to click. I returned to Reddit to see what other gems I could uncover. After a few days, another topic of investing came up. This time another redditor directed the OP to check out the book Millionaire Teacher.

I found the book and absorbed everything I could. It was everything I was looking for to understand investing. Once I finished, I read it again. I decided that I too would invest in mutual funds that followed an index.

The next problem was getting started. I did another search on Reddit and found myself viewing the model portfolios at Canadian Couch Potato. This was perfect. Exactly what I was looking for. I looked through the model portfolios and realized that I could get started immediately with option 1 since wifey and I had Tangerine accounts. It was a matter of minutes to get a couple of TFSAs and RRSPs open in our accounts. We were already using the Tangerine accounts to hold our RRSP savings accounts and regular savings accounts, so transferring the money to purchase the mutual funds was fairly easy. In addition, despite lower MERs, options 2, 3, and 4 seemed harder to implement. After a quick Google search, option 2 required going to a TD branch in person or opening a TD brokerage account that charged fees for buying and selling.

After I was finished, I felt good with myself. I had just taken my first steps into investing.

I continued to visit the Canadian Couch Potato blog to read up on the articles. Some were too advanced for me. However, unlike before, I found myself understanding the topics better. Occasionally, I would return to Reddit to look at the Personal Finance Canada website.

One day while lurking on Reddit, I saw a link to the Financial Independence subreddit. It was okay. The main reason I mention this is that this link brought to my attention the existence of a badass blog written by Mr. Money Mustache**.

If you've never read the MMM blog, I suggest you do so now. It's simply the most badass thing ever. After a couple weeks of reading, I was inspired to change my habits and spending. The real turning point was the guest postings regarding investing in Canada. It didn't occur to me that a MER of 1.07% (at Tangerine) was basically paying 5 times (5.879 times, so almost 6) the fees of the Vanguard ETFs (approximate MER of 0.182% for my current portfolio).

I dug in and opened some accounts at on online discount brokerage and opened an e-series account at TD for wifey.

We transferred our TFSAs and RRSPs to our new accounts and purchased ETFs and TD's e-series mutual funds.

Before we started this change, 85% of our money was in cash or cash equivalents earning a miserable amount that was losing to inflation.

Currently, 75% of our money is invested in the stock market. There is still quite a way to go, but small steps.

We're only just beginning.

*Up here our dollar is called the loonie. Neat, huh?

**I know it's spelled moustache up here in Canada, but this is the guy's American moniker.