Planning

This 6 week workation was part of 2.5 month workation between Portugal and Ireland. See details of the Portugal portion here.

Flights

Per the Portugal update, we booked the below route for about 2,872$ (1,967€)

• Montreal – Lisbon return (2,424$/1,660€)
• Bus Lisbon – Portimao (80$/55€)
• Faro – Cork 1 way (214$/147€)
• Dublin – Lisbon 1 way (154$/105€)
• Lisbon accommodation 2 nights (Free via homeexchange)

Accommodation

Accommodation in Ireland is expensive and hard to come by. It took a good bit of searching but we managed to find a lovely spot close to the sea. As it was not in the city we also needed to rent a car to get around which added to the expense.

Sites I checked to find accommodation:

• Daft.ie – search for short term rentals or holiday homes
• Homeexchange.com
• Booking.com
• Hogans Irish Cottages
• Trident Holiday Homes

As we wanted to catch up with as many friends and family as we could we decided to split the trip up.

We spent 3 weeks in Cork, 2.5 weeks in Mayo/Sligo and 4 days in Dublin.

In Cork, we stayed in one rented accommodation that came to 2,654$ (1,818€) for the 3 weeks. We also had to pay an additional sum at the end for utilities which came to 365$ (250€).

For the 2.5 weeks in Mayo/Sligo, we spent 1 week in Ballina for free using our guest points from Homeexchange. A few nights in Strandhill with Mr.MH’s sister and the remainder at Mr. MH’s home.

For the 4 days in Dublin, we split it between Mr. MH’s siblings.

We also had a 2 night stop over in Lisbon to break up the return trip which we again had for free through Homeexchange.

Car Rental

There used to be a day when I would go out of my way to save money by using public transport, but my relationship with money has shifted over the years, especially now that we have Little MH. Now, I am willing to pay a bit more to make things easier on ourselves. It was also important for us to be able to get out to visit our friends and family while we were in Ireland so renting a car made the most sense.

Renting a car in Ireland is, let’s say, interesting.

I’ll try to summarise how best to go about it, to save hassle and added costs.

Before you book:

• See if you have a credit card that offers car rental insurance as an added benefit or see if you can apply for one before your trip.
• Call the credit card insurance provider and get a letter in writing that states that coverage includes the Republic of Ireland. The wording has to be exact. The car rental will not accept terms like “Worldwide” or “Ireland”, it has to state Republic of Ireland specifically for them to accept the waiver. The credit card company may point you to the standard terms and conditions but insist that you get a separate specific letter with the card holders name on it.
• Make sure the credit card is in the name of the person that will be driving, if it isn’t, see if you can order a supplementary card with their name on it
• Make sure you have enough credit to cover the 5,000€ hold that will be placed on the card for waiving the car rental company’s insurance.

When you book:

• Make sure you select an automatic transmission if you can’t drive manual as most cars will be manual, especially if in our case, you converted your Canadian license to Irish, there may be a restriction to only be licensed to drive automatic cars.
• Make sure you waive the car rental company’s insurance when booking.
• Use the credit card that has the car rental insurance as a benefit for the entire booking. The name on the card should also be who will be the driver.
• Decide who will be the driver if you don’t want to pay extra to have both people covered to drive. As above, the driver is whose name should be on the credit card used to waive the insurance.

When you pick-up:

• Make sure you have the letter printed off that states your credit card’s insurance includes coverage in the Republic of Ireland, or better yet send the letter by email in advance to the car rental to ensure they have no issues with it before you arrive.
• Make sure you have the credit card in the name of the person who will be driving
• Make sure you have 5,000€ free on the card for them to place a hold. This will be held for the duration of the rental.
• Make sure you have an in-date license to present
• Walk around the car, taking a video and pictures, to show any damage already on the car, before you drive off the lot.

You can only rent a car for a max of 1 month so if you need it for longer you can just do another booking and get another car for the remainder of the trip. You’ll need to pay again for the extras like car seats and one-way transfer fees if you’re dropping at a different location but that’s not too expensive for the hassle you save from taking public transport with 2.5 months worth of luggage and any groceries you will have accumulated from the stay.

We booked through rentalcars.com and got an automatic Toyota Yaris for the full 6 weeks for 1,112$ (761€) and paid an additional 445$ (304€) for 2 car seat rentals and 2 one-way fees as we had to swap cars at the one-month mark. So about 37$(25€)/day total.

School

We continued some of the activity books we got from the school but also borrowed some lego’s from Little MH’s cousin and some new activity books from friends. Social-wise, we had so many play dates, catch ups and sleepovers with friends and family. It was wonderful.

During the week, Little MH got to go to the sea, climb some sand dunes, go to an indoor trampoline park, meet an Irish wolfhound pup, eat award winning ice-cream, drive a car out to Coney Island, visit playgrounds and other activities.

What it cost

The below details what it cost for the 6 weeks in Ireland in Mar/Apr. Flights are proportioned 60% to this portion of the trip and 40% to the Portugal portion. It also includes a 2 night stop over in Lisbon on the way home. The total cost excluding ongoing costs at home was 9,901$ (6,782€) which averages 6,601$ (4,521€)/month.

• Accommodation: As above, the only costs we paid for accommodation was for our 3 weeks in Cork.
• Food/drink: included groceries, take-aways and restaurants.
• Flights: included 60% of the costs of our flights from Montreal to Lisbon, Faro to Cork, and Dublin to Lisbon for 3 people.
• Transport/Parking: included car rental, petrol, tolls and ubers.
• Entertainment: included a night out, a spa day for me, the trampoline park, and entrance to see the Palace of Monserrat on our stopover in Lisbon (highly recommended).
• Shopping: includes a clothes top-up for Little MH who had outgrown some of the clothes we brought.
• Costs at home: included rent for the full 2 months (not proportioned for 6 weeks), mobile and internet.

Our current estimates on what we will spend per year in Canada is 64,000$ (44,000€) or 5,333$ (3,652€)/month. Averaging out the 6-week stay into the average for 1 month the stay in Ireland was about 1,500$ (1,000€) more than that not including the ongoing costs at home or 2,800$ (1,900€) more per month including ongoing costs at home.

How it went

Overall, it was a great stay. It was a big contrast to Portugal where we saw very few people. Once we were in Ireland, we had catch-ups with friends or family once every few days. We:

• had a dinner and a few sleepovers with some of our best friends
• had a birthday party at Little MH’s cousin’s house
• had a few friends call out to us at ours
• had a dinner with Mr. MH’s whole family and all of Little MH’s Irish cousins at a restaurant
• climbed and ran down some sand dunes (I still have sand in coming out of my shoes months later)
• had the best dinner I’ve had at a restaurant in quite some time (check out Stoked if you’re ever in Strandhill in Sligo – go with a group and order one of everything (tapas))
• had proper catch ups with family.

I also got to go into the office and catch up with workmates and had a full spa day and dinner with a friend. I also got to go for my morning walks in beautiful locations a lot warmer and greener than I would have at home, some through forests, by lakes and by the sea.

For our stopover in Lisbon, we met up with some new friends I had reacquainted with when we were in Portimao, and went to Sintra, had some of the freshest and best pastel de natas I’ve had so far, went to the Palace of Monserat (some of the nicest architecture I’ve ever seen, Little MH was so excited and impressed to be in a real castle – it looked very regal), took the scenic route back to Lisbon through the most Western point of Europe (Cabo da Roca), and stopped in Cascais for dinner at a vegetarian restaurant where they have all the dishes prepared on a table for you to see before you order.

After all that, however wonderful, I was dysregulated and tired and looking very much forward to getting home and back into a routine, keeping in mind that I was still working 3-4 days a week between all those visits and activities for most of the stay.

Once home, while my Dad collected us from the airport, my Mom turned the heat back up in our house and had a fresh pot of homemade soup and homemade apple crisp with apples off last year’s tree waiting for us in the oven when we got home. My Dad had also finished the extension he had been working on in the house so we had a whole new space to expand into. These are just some of the things that continue to remind me that the move home was the right choice for this chapter of our lives.

The first few weeks home were very low-key, not including the first few days where I rearranged all the furniture to make the best use of the new extension.

I had also put on an extra kilo from all the restaurants, pastries and fresh food, so definitely tried to up my exercise game to shake that, which I’ve thankfully been able to do (months later). Totally worth it.

Lessons learned

The only thing I think I’d do differently about this trip, next time, would be to do a bit less moving around so I don’t get so dysregulated. Other than that it was pretty great.

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Planning

Why/When

Firstly, I’ll cover off why and when we decided to travel.

When we were moving from Ireland to Canada last summer, I wanted to have a trip planned back to Ireland within the year to take the sting out of saying goodbye to the life we built there over the last 9 years. Knowing we’d be back in a few months made it easier.

We also wanted to trial slow travel, where you stay for a longer period than a typical vacation in any one location before moving on to the next. This method of travel is used by a lot of families who worldschool and travel full time. It is easier on the mind and body in terms of adapting to change and usually cheaper as you can avail of long-term stay discounts.

In terms of when and where, Ireland was obviously part of the equation but when we decided that we’d want to be in Canada for the summer, it made sense to travel somewhere warmer during the winter. Travelling in the off-season is also quieter and cheaper. When we lived in Ireland, Portugal was only a 2.5 hour flight away and we had been a few times and knew we liked it.

I played around with different durations, originally we planned on travelling for 3 months but when it came time to actually book we felt this might be a little too long to be away from our home base and cut it down to 2.5 months.

Flights

As usual, I had a spreadsheet to plot out the trip. I looked at a few different flight routes and checked prices on google flights fairly regularly to get the best price. Once upon a time, I would have looked for the cheapest deal only regardless of duration and flight times but now I know what toll it takes on my body and I’m willing to pay a bit more for better options. I generally try to find direct flights that leave between 10am and 8pm. I’d love to avoid red-eye flights but that seems to be the only option from Montreal to Europe.

The route options I looked at were:

Route 1:

• Montreal-Lisbon 1 way
• Bus Lisbon-Portimao
• Bus Portimao-Faro
• Faro-Cork 1 way
• Bus Cork-Dublin
• Dublin-Toronto 1 way
• Toronto train to Ottawa

Route 2:

• Montreal-Lisbon return
• Bus Lisbon-Portimao
• Bus Portimao-Faro
• Faro-Cork return
• Bus Faro-Lisbon
• Lisbon accommodation 2 nights

Route 3:

• Montreal Lisbon return
• Bus Lisbon-Portimao
• Faro – Cork 1 way
• Dublin – Lisbon 1 way
• Lisbon accommodation 2 nights

All 3 options priced out at about 3,100$ for the 3 of us. That meant the choice was really down to preference. We opted for Route 3. The longest day was the first flight and bus, the rest were direct 1 way flights/bus trips.

Accommodation

Once we had the flights/dates booked, we needed accommodations. Portugal was the simplest as we were staying in one location for the whole duration. I searched on booking.com, homeexchange.com and a local real estate office which we had found through booking.com and had stayed with a few times before.

As we had been before we knew the area and where on the map we wanted to be so it made it easier to narrow down where we wanted to be.

We ended up booking a three-bed apartment with huge balcony as we hoped we would get some visitors to come stay with us.

School

Little MH is in kindergarten so school is not yet mandatory in Quebec. We let the school know the dates we’d be gone and they provided us with some activity books to work on while we were away.

In terms of socialisation, I found some local ex-pat/digital nomad/ worldschooling Facebook groups in Portimao. During the week, school-aged kids are in school so the playground isn’t a guarantee to find similar aged kids, unless they’re on holiday. The world schooling/digital nomad groups would have more school-aged English speaking kids available during the week for meetups. Little MH went to one of the group meetups while we were there but in general was happy out with just us. While I was working, Mr. MH and Little MH would go to the playground, play on the beach and play ball on the boardwalk.

Packing

We’ve gotten fairly good at packing minimally after all our travels. This time we managed to keep it to 2 40L backpacks, 2 regular backpacks and 1 large handbag.

At a high level we brought:

• 4-5 days worth of clothes each
• Minimal toiletries
• 3 months of diabetic supplies
• School activities, pencil, eraser, markers
• Electronics:
  • Work laptop, keyboard and mouse
  • Personal laptop
  • PS5
  • Nintendo Switch
  • Plug converters and chargers

I have a “leaving for months” checklist at home that I’ll add in at another time that includes the things we needed to prepare before we left to maintain the house/car ie: have plants watered, mail collected, arrange to have the car driven periodically to stop the battery from dying etc. I’d keep a paper list in the kitchen that we could add things to in the days coming up to the trip to help keep track of things not to forget.

What it cost

The below details what it cost for the 1 month in Portugal for the month of Feb. Flights and travel insurance are proportioned 40% to this portion of the trip and 60% to the Irish portion which I’ll detail in another post. The total cost was 4,342€ (6,338$).

We of course have ongoing costs at home which add to this. Costs for Feb for remaining expenses like Rent, Electricity, Internet etc came to 1,369€ (2,000$). Some of the travel costs like flights and accommodation would have been paid in December and January so the outgoing for Feb was not the full 6,292€ (9,187$).

Our estimated annual spend for the 12 months including travel is 44,000€ (64,000$), this averages out to 3,652€ (5,333$)/month. So the Portugal portion on its own is only a little over 1,000€ more than the average monthly spend.

How it went

In summary, it was lovely. The weather was warm and sunny and we had the beach, boardwalk and restaurants pretty much to ourselves, which is typical for this time of year. Working from a nice location was also great.

That said, a month is probably our limit. As we experienced in a previous mini-retirement, even though we had people visit us, it does become very isolating to not have friends and family to visit on the weekends.

A typical work day

• I would wake up naturally without an alarm between 7 and 8am
• Make my way to the kitchen for breakfast
• Little MH would already be awake, playing the switch or PS5
• Make myself and Little MH breakfast, having my tea on the balcony in the sun if it was out
• Get dressed, brush teeth etc
• Go for a walk on the beach by myself, taking a few moments to consciously breathe in the fresh sea air and look up at the sky without sunglasses to let in the morning light to my retinas to set my circadian rhythm and regulate hormones.
• Get back, grab my water bottle and log on to work
• Mr. MH would usually get up some time between 9 and 10am and get himself and Little MH ready to head out for some activity and groceries.
• I would typically have lunch by myself on the balcony
• Work for a few more hours
• Mr. MH would have dinner ready by the time I log off from work
• Eat dinner together as a family
• Spend the evening sometimes doing a school activity or playing card games, sometimes doing our own thing.
• Get Little MH ready for bed and asleep some time between 8:30 and 9pm. I’d usually go to bed at the same time as Little MH.
• Mr. MH would stay up a bit later.

A typical weekend

Similar to the work day in terms of wake up and sleep routine. We’d go to restaurants more often on the weekend. Sometimes for brunch, sometimes for dinner, heading down to the beach and playground either before or after food. I’d call home at some point. We had Mr. MH’s sister over for a few nights one weekend.

A few weeks before we got to Portugal, I saw on Facebook that someone I went to school with was posting pictures of Portugal. We got to chatting and it ended up they had moved there in 2020 and spend their summer’s at a cottage 20 minutes from where we are living now in Canada. Although I was probably 12 years old the last time I saw them in person, we decided to meet up. They came down with their partner for a night and we got to catch up. We will likely meet up again this summer. Such a small world.

Lessons learned

As with every trial, there comes some error to learn from As long as we learn from them, it will make the next trip even better.

1. We may have been able to save money on groceries by availing of grocery delivery from bigger chains. Continente and Uber Eats offer food delivery which we’ll likely avail of next time.
2. Uber/Bolt to and from the airport is only slightly more expensive and less hassle than the train and bus that we used to take. The bus/train takes 1.5 hours from Faro to Portimao and you still need to use Uber to get to the train and to the accommodation costing about 28€ for the 3 of us. Uber was 50 minutes total, 40€, and no timetables to worry about.
3. In regards to deposits, from now on we will take a video tour of the accommodation as soon as we get there. This trip Little MH accidentally pulled a curtain rod down and as a result the property manager did a thorough walk through when we left and blamed us for breaking a number of other things that were broken when we got there. We are still trying to get some of our deposit back on this one. Also, best to give the deposit as a separate payment not included in the total for the accommodation so that you can dispute it with your bank if needed. Lastly, perhaps booking through a website like booking.com rather than directly though the property company might give you more protections in terms of these types of disputes.
4. Packing wise – next time we might try to pack 1 checked bag between us. Having to carry all our bags on our backs any time we move around is cumbersome. While it’s nice to not have to wait for your bag in baggage claim and there is no risk of it going missing, we’re still trying to find the balance of what we carry and what we check.
5. As mentioned before, a month is probably a little too long, unless we can get more people to come visit us. I think the sweet spot might be 3 weeks.

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The time off has given us some insight into what it would be like to retire early. We enjoyed the time so much that we have now structured our investments in a way that we hope will allow us to do this regularly, at least while our son is still small.

While this time off was initially meant for me to focus on my health, there were a lot of other things we got to learn and experience that we wouldn’t have if we were working.

Finances

As this is a financial independence blog, I’ll start with the financial realisations.

Non-employment income

One of the most interesting realisations I had during our extended time off was that while I had focused heavily on where we spent our money, I hadn’t looked at non-employment-related income. When we stopped working, we still had money coming in.

When I looked back at the last almost 4 years, it ended up that we had an average of 7,500€/year of non-employment-related income coming in. 38% came from tax refunds (explained below), 31% of that came from blog-related income, 23% came from the child benefit and 2% from credit card cashback rewards. If I added in after-tax dividend income (before we invested all of our assets), it brought the total to 8,600€/year.

While this income is not fixed, permanent or reliable, it has been consistent over the last 4 years, which is long enough for me to feel comfortable factoring in that I do not need as much as I thought I did to reach financial independence.

Our original FIRE calculations did not take into account any money we may make once we stop traditional employment, nor did it take into account social security or any possible inheritances. All calculations erred on the side of caution and scarcity.

Now that we’ve been off for over a year, my mindset has drastically shifted. It’s given me a new perspective, one of abundance. To use the money we have now to live the best life we can (optimised and within reason of course). I’m even considering gifting money where before, I would have hoarded it. The more positivity and abundance I feel, the more seems to be drawn to me.

Tax refunds

Another realisation, which should be obvious but hadn’t occurred to me, is that working less means much less income tax and results in big refunds from any of the year that you did work. As Mr. MH was also off, we could also claim the Home Carer tax credit against my income, which only gets applied at the end of the year and results in a bigger refund.

From the 2020 tax year, we got a refund of almost 700€, for 2021 we got a refund of 2,700€ and for 2022 we got a refund of 8,200€.

The less I worked, the bigger the refund.

If semi-retirement is something you could be nearing, don’t look at how many months you’d need to work to cover your annual expenses at your current tax rate. Figure out instead how many months you’d need to work at say a 10% net tax rate instead and look at any other regular non-employment income that might be coming in and see what a difference it makes.

Costs to work

Having time on your hands allows you to unintentionally save money.

When both parents are working, you might spend more money on take-away dinners, lunches at work, use more petrol or public transport, have a gym membership to get your recommended level of exercise and travel at peak periods due to school breaks.

Since both of us have been off, we have cooked more, eaten almost all our lunches at home, used far less petrol, gotten exercise from just living our lives and get to travel more cheaply as we travel at off-peak times and can stay for longer which costs less.

On the exercise front, neither of us are very active, however this summer I managed to close the exercise ring on my watch (30 minutes a day) for 21 days in a row without trying. With all the swimming and walking and paddle boarding, I got my recommended daily exercise without effort. If I had been working, I’d have been sitting at a desk and would have had very little energy at the end of the day to fit in any exercise.

Unfortunately, I haven’t kept up that level of effortlessness but did want to highlight that for those thinking retirement would cost more than if you were working because you would not have work subsidies or would have more time and want to travel, that is not necessarily true.

Being off work also allows you to take advantage of getting to do things when they are less busy and less costly. Early bird menu’s, mid-week spa rates, getting a playground or nature walk all to ourselves and so on.

Renting instead of owning

Renting instead of owning a home has been a change that has resulted in less stress and less expense.

Less Stress

No stressing about mortgage rate increases or housing market crashes and no stressing about maintenance when things break.

Fewer Expenses

Less money spent on renovations. Less money spent on home ownership costs (purchase and sale costs, maintenance, property taxes, refuse, insurance etc).

We owned our home in Ireland for 5.5 years. If we average out these costs over the 5.5 years, we spent the following to own it:

• 7,200€/year on renovations, purchase and sale costs
• 3,800€/year on mortgage interest
• 1,200€/year on maintenance
• 1,100€/year on home insurance, property tax, mortgage insurance and refuse
• 13,300€/year total

We sold it for more than we bought it for and estimate it earned us an average of 6.63%/year (tax-free) on the money we had invested into it.

Now I know the argument for home ownership is not purely financial. For us, we bought because we wanted security to not be kicked out, to put our own stamp on things and to control rising rents. We loved our home and it served us well.

That said, we now pay the equivalent of 8,100€/year in rent (2 bedroom 1 bath in a very remote area in Canada) and have our money invested. So far this year our investments have earned us 14.53% (before tax), but since we haven’t worked much this year, we will pay very little if any taxes on any withdrawals.

And before people say that level of rent is impossible in Ireland, looking on Daft today (Dec 2023), there are a number of 2-bedroom properties available around the country for between 850€ and 1,000€/month – if you’re willing to downsize and have the option of working remotely. Not that I recommend isolating yourself, but if any of these are closer to a community you already have and can reconnect to, it could be food for thought if it could allow you to semi-retire much sooner than you’d originally thought.

Travel

During our 16 months off, we travelled to Canada (2.5 months), Portugal (1 week), Canada (Moved), France (3 weeks) and Mr. MH travelled to Birmingham for a Football match. If we’d been working, we would not have been able to travel to half of those places or for half as long.

Most of these trips also included friends and family. Time in Canada was spent catching up with friends and family. Our trip to France was for the Rugby World Cup and we had at least 8 of our closest friends and family stay with us at different points during our stay there. Mr. MH also went to a football match in Birmingham with a childhood friend.

We got to mix in my passion for travel and Mr. MH’s passion for sports AND got to share it with some of our favourite people.

Family time

We also made up for lost time from the pandemic and crammed in so many family catch-ups.

Between christenings, confirmations, communions, birthdays, sporting events and other family gatherings, Mr. MH’s family got together once or twice almost every month. Given how large Mr. MH’s family is, that is no small feat. I think with nieces and nephews included, there are about 25 of us that come from all over the country.

We were to Mayo 4 times, Tipperary at least 3 times, Dublin twice, Galway and Leitrim once each and Mr. MH got to 5 Rugby matches in Cork, Limerick, Galway and Dublin.

Again, something we would not have been able to manage if we’d both been working.

Our calendar looked something like this:

Pink is international travel, Blue is national travel, Green is sporting events and Black are milestones.

Friend time

In addition to the additional time we got with family, we also had more time with friends.

At this time in our lives, our friends are so very busy with work, kids and all the activities that come with juggling the two. As time with friends is a priority for us, and because we had more flexibility, we would arrange to go to our friend’s houses when best suited them. If we’d been working we wouldn’t have seen our friends half as often as our schedules just wouldn’t have lined up. We would even text friends mid-week and see if they wanted to come by for dinner or even bring a slow cooker out to their house for us all to eat together. Using our time to save them time and get some extra time together.

We also had the flexibility to meet up with friends when they were off during the week. We could go meet up for coffee or lunch in town or meet friends who were on maternity leave for walks or playground visits. I got to go to the spa mid-week a few times with friends who were off from work.

During the summer, a friend was on sabbatical and we met up to spend a day on the lake, floating around and laying in the sun. It was the first time in my adulthood that I can remember just laying on the ground and watching the clouds rolling by – queue Otis Redding.

Couple time

When we were still in Ireland, our son was in playschool for 3 hours a day. As we were both off, we would use this time to go on brisk walks together in nature. It was a great way to get exercise, fresh air and quality, child-free time together. Once we were in Canada and our son was in school all day, we used the time to watch movies and play video games together.

Me time

As I’ve been focusing on getting healthy, my sleep routine has shifted in that I go to bed around the same time as our son. If I were working, this would leave very little time to do anything for myself. As I’ve been off, I had time to decompress, listen to podcasts and read books that energise me and do active rest activities that I enjoy like diamond painting and jigsaw puzzles while listening to music. It’s been nice to feel like an individual again and be able to get some time to focus on things uninterrupted.

Mr. MH also followed his interests and did his own thing. He listened to copious amounts of sporting podcasts and recently started a full-time 10-week French course which he’s really enjoying.

Parenting

In terms of parenting, I’ve realised that no matter how much time you have, you still want to just do your own thing. I thought that if I was off work I would have so much more time to spend with my son and I could stop feeling guilty looking at Instagram pages with educational activities parents were setting up for their kids. I had all these ideas of activities we could do together, fun crafts, outdoor activities, cooking and baking together and so on. Once both me and Mr. MH were off, it didn’t really change how much time I did active things with our son. While Mr. MH was good to bring our son to the playground and get him outside, I might sit on the floor to play with him for 5 minutes to get him going on something but then I’d get up and go back to doing housework, laundry, cooking or even something leisurely I was interested in. I say this because I thought it was important to stop feeling so guilty, especially if you are working and have little quality time with your kids. To say that, even if you were off full time, you probably wouldn’t have much more time as it gets filled up with other things.

The other thing I’ve really appreciated is that with both parents being off, we had so much more flexibility and less stress. Having both allowed us to be more present and patient with our son. If play school or school was closed at a moment’s notice, no problem. If our son was sick, we didn’t have to worry about who was going to take work off. If our son was having a tough week, we just kept him home. If we have a family event on a bank holiday weekend, no rush, we can leave whenever suits, or even the day before and make it a longer weekend. If we have travel coming up, packing and organising isn’t stressful as we don’t have to juggle work schedules before we go. Having less stress allows us to create a calm and consistent home environment which is so important for a child.

Time and Boredom

The last thing I’ll comment on is that no matter how much time you have, it will get filled up.

When I first went down to a 4 day work week, I thought I would have so much more time for all of the things I mentioned above, but I didn’t – it helped but wasn’t near enough for what I hoped. When I was planning to take extended time off, I thought it would be easy to find time to exercise. It wasn’t.

If you want to spend time on things that are important to you, you need to make those a priority. You need to safeguard your time as it really is your most precious resource. If you don’t guard it, others will take it up.

In terms of boredom, I can honestly say, it’s only started to creep in recently as I’m alone during the day, with little MH in school and Mr. MH in his full-time French course. You may have noticed an uptick in blog posts – this is how I’ve been filling my time! It wouldn’t take long though for me to get into a new routine and find new things to fill my time. It would just be a period of adjustment.

That said, I am actually looking forward to getting back to work and catching up with my colleagues. The last time I worked, it was for a 6-week contract and it was a trial run for myself to see if I was ready to get back to work. I actually found myself energised by the work, to use a different part of my brain and have problems to solve on a daily basis. To feel like I was contributing to something. I do think that semi-retirement is a happy medium. To dip in and out of work life as wanted/needed. Will keep you posted on how it goes.

Asset shift

Before we moved back, our assets were split per the below chart:

Our home made up the majority of our equity (66%), then our Canada ETFs and Irish stocks (Mr. MH’s old work scheme) made up 11% each and our Irish ETF portfolio made up 7%. We kept a cash buffer to cover a few months of living expenses, making up 3% and our car made up 2%.

For now, our new asset breakdown looks like this:

79% of our equity is now made up of our Canadian ETF portfolio. 12% remains in our Irish stock account which we will start to sell off when we start to withdraw from the portfolio. 5% is the value of our car and 4% remains in cash as an emergency fund.

In terms of existing assets, I wasn’t going to sell them off and trigger a tax event unnecessarily so for now our portfolio will look a bit more complicated than it needs to be. Eventually, as we start to sell off funds when we start to withdraw, we will sell off the funds we no longer want to hold first and our portfolio will get simpler over time.

Detailed Canadian ETF Breakdown

Once we moved, we had to decide how to restructure our assets. I didn’t want to have assets in 2 countries as I didn’t want to have to keep filing taxes in both as well as to continue managing multiple investment accounts and portfolios. I’m a big fan of the keep-it-simple approach.

As mentioned in my last post, we decided we would rent instead of buy a new home for the time being and so we wouldn’t be needing any large sums any time soon and even if we do want to buy again, we’ve decided we’d like to save up and start again, leaving the rest of our assets invested to grow.

To start building out our new portfolio, I did up a budget, figuring out how much cash we would need to cover the next twelve months including the purchase of a new car and other setup costs. I also figured we needed to leave some cash in our Irish account as we had plans to travel to France, Portugal and Ireland within the next twelve months and there was no point converting the cash only to convert it back again a few months later. Once I knew how much we needed to leave out, we took the money from the sale of our Irish home, sold our Irish ETFs and moved the money to Canada. From there I took the opportunity to apply the knowledge I’ve acquired in investing so far and made up a new consolidated ETF portfolio.

Initially, I was just going to continue replicating the ETF portfolio I already had. It has performed well enough and has good diversification, but when it came to investing the largest sum of money I will probably ever invest at one time, I thought about all the other long-time FIRE bloggers that I follow. All of the American bloggers have said time and time again to just invest in VTSAX (Vanguard Total US Stock Market Fund) and block out the noise about anything else. J L Collins says he plans to never sell and just live off the dividends.

The bloggers I follow worked to reach their full FIRE number before retiring early but have way more now than they will ever need, partly because they never really stopped working. They just work how and when they want to work now, on things that they are passionate about. Working for money is optional for them but if you have the drive to reach FIRE, you are not going to be the kind of person to sit back and never earn money again. Looking at my investment portfolio and own journey to FIRE in this light gave me new perspective. I decided I would follow suit and take a bit more risk than I previously would have by investing in one ETF with exposure ONLY to the US stock market.

Consideration 1: VTSAX is not available in Canada. After some research, I found a very similar fund. This post gives a good comparison. In summary, if you buy VUN (Vanguard Total US Stock Market ETF), it’s made up of the same underlying stocks as VTSAX but it is purchased in Canadian Dollar. Unfortunately, the annual management fee is 4 times higher than if you were in the US (0.16 instead of 0.04) :(, I suspect this is due to currency conversion costs.

I could have converted my Canadian Dollar to US Dollar and bought VTI or VUS (other similar funds in USD) but that added more complexity, more currency hedge risks and would subject me to US withholding taxes which I’d have to track and claim back at tax time. Again, I’m all for the Keep It Simple approach which just means I’ll pay a slightly higher annual fee.

Consideration 2: Not all of this money is mine alone, some belongs to Mr. MH and so he had to agree with the latest shift. He bought his previous ETF portfolio after me and although his was made up of the same funds as mine, the timing meant that his portfolio dipped for much longer and his best-performing fund during the pandemic was VCE (Vanguard FTSE Canada Index). Because of this, he felt more comfortable keeping at least some of the portfolio invested in a Canadian stock market ETF.

This meant that our target portfolio allocation was going to look something like 95% VUN and 5% VCN (Vanguard FTSE Canada All Cap Index) – this is a newer, broader ETF than VCE.

I started off by investing the proceeds of our house first. I bought mostly VUN and a small amount of VCN per the plan. Then as we were moving over the proceeds from our Irish ETF portfolio my nerves started creeping in about how over-exposed to the US markets we were. I decided I wanted to build back in some regional diversity and looked for another fund or two to help round out my portfolio. As we add more money we will purchase the other funds to balance it out a bit more.

Previously our ETF portfolio was made up of 5 funds. Now I think I can get the diversification I’m comfortable with in 3.

Our new target is something like 80% US, 15% Developed Markets excluding US, 5% Emerging Markets

This should give us a weighted MER of 0.19%, estimated annual growth of 12.02% and estimated annual dividends of 1.58% (based on returns since inception per current fact sheets).

Our current portfolio including our Irish stocks currently looks quite disorganised but I’m ok with that as the estimated returns of the portfolio are slightly better than the above projections. Our current weighted MER is 0.18%, estimated annual returns are 12.28% and dividends of 1.37%.

Once you get to a certain level of funds, you can start to see really fun gains or really scary losses on a daily basis. This has been an interesting experience. Our life’s savings are literally all in the stock market. We signed up to an account which lets you consolidate all of your investment accounts into one dashboard with reports. So far our Canadian accounts have gone like this:

The blue line is contributions and the green line is value of investments. So in August, we lumped in our house proceeds and we saw a nice uptick, very shortly followed by a downturn which didn’t go below our initial contributions but was still a drop of 24,000$ in the span of a few weeks. Thankfully, this has now gone back up to above where it was at the previous peak but before you go putting large sums into investments, be sure you are committed to the buy and hold strategy as the smallest drop in your share price can result in big drops in your portfolio. If you sell when it dips, you are locking in your loss, but if you hold on for long enough it will recover.

The current year to date returns are coming in at 14.53% not including dividends.

Different accounts

Another thing I haven’t gone into yet are the different investment accounts available in Canada. As soon as we got back, we opened up a number of new accounts under each of our names in order to maximise our tax benefits. Below are the different accounts we currently hold in each of our names.

• Tax-Free Savings Account (TFSA)
• Register Retirement Savings Plan (RRSP)
• First Home Savings Account (FHSA)
• Margin Account

The TFSA gives you a certain amount of money you can invest per year tax free. This is after tax income but grows tax free and is tax free on withdrawal. Unfortunately for us, your contribution room stops growing once you are out of country so we only have a portion of the 88,000$ room other Canadians have. Still it’s a great account to have.

RRSP’s are similar to Irish pensions in that they are tax-deferral accounts with annual contribution limits where you contribute to them in your higher earning years to reduce your taxable income, the investments grow tax free until withdrawal, at which time you pay your marginal income tax rate. The benefit Canadian RRSPs have over Irish pensions is that you can easily open an account and manage the funds yourself and there is no minimum age for withdrawal.

FHSA’s are tax-free savings accounts to help people save for their first home. There are annual contribution limits up to a maximum of 40k, contributions are tax-deductible, growth is tax-free and withdrawal is tax-free. Contrary to what the name implies, if you have NOT owned your primary home in Canada in the last 4 calendar years, you are still eligible for an account. If you do not decide to buy a house in the end, you can roll the money into your RRSP without impacting your RRSP contribution limits. Your contribution room only starts growing once you open an account so even if you don’t intend on investing/saving for a home, it might be a good idea to open an account just in case you do in the next few years.

Margin accounts are your usual taxable after tax investment accounts.

As we’ve been out of country for 9 years, our contribution room in our TFSA and RRSPs are not as high as they could be but something is better than nothing. So for now, we have maxed out our TFSAs, RRSPs and FHSAs and lumped the rest in our Margin accounts. As I haven’t worked much this year, this may seem like a waste as I won’t have income tax to reduce but getting the money invested and allowing it to grow as soon as possible will outweigh the tax savings I would have made if I had spread it out over higher income earning years.

There is also a Registered Education Savings Plan (RESP) we may look into for our son but I’m not 100% sold on the benefits vs. restrictions. Should our son not go to third level education in Canada, your marginal income tax is charged on withdrawal PLUS a 12-20% withdrawal penalty. For now I’ll just keep investing in our other accounts and use those funds to pay for college if needs be.

As Forest Gump once said: That’s all I got to say about that.

There have been some big changes in the Money Hacker household over the last 12 months. Aside from my journey back to mental wellness, we’ve had some exciting changes too. This post will cover the What, When, Why, and How’s of what’s been going on.

What

We moved back to Canada! We sold all our assets (house, car, furniture and Irish investments) and moved all our money to Canada. We are now renting a two-bedroom house in the countryside and have invested all our money in ETFs (exchange-traded funds). We are test-running semi-retirement, seeing how our portfolio performs to see how much or how little we need to work to cover the rest of our expenses. We’re also looking to split our time between Canada, Portugal and Ireland over the next 12 months. Should we wish to buy another house at some point, we will start over, building up a new downpayment and getting another mortgage. We would hope that our portfolio growth would cover our mortgage payments at minimum at that point and would still be mortgage-neutral.

When

I knew in June of 2022 that I wanted to move back. It took many months for me to convince Mr. MH that this was not a passing whim (of which I have many in fairness to him). It was particularly hard for Mr. MH to come to terms with as I had been so adamant only weeks prior that I had zero intention of moving back to Canada for as long as I could see. Given my state of mind at the time, I can understand his reluctance. During the time it took me to convince Mr. MH, I researched, plotted and planned. We sold off furniture and toys, donated books and got the house ready for sale. Whether we moved to Canada or not, we still planned on selling our house and moving within Ireland to somewhere closer to family/friends as you’ll read about below. In the end, we reduced our last 9 years and a three-bedroom house into a 20-foot shipping container. Finally, by June of 2023, we flew back to Canada with what was left of our belongings trailing behind us.

Why

Part of the change stemmed from the isolation I felt during the pandemic and my state of mind. I was in search of 2 things. 1. The ability for me to quit work, preferably with Mr. MH off at the same time for a significant amount of time and 2. Community. I ran through many scenarios trying to figure this out.

One of the silver linings of the pandemic is that it opened up the opportunity to work remotely and although that has changed somewhat since, there are still opportunities that weren’t there before.

At one point, we were looking at buying an old farmhouse on 5 acres of land in Mayo to be closer to Mr. MH’s family and to be in nature.

At another, we were looking at a house in the same estate as some friends of ours in Cork where we could be mortgage-free and live off one part-time income. And every option in between, each option we considered had to tick both boxes, and for each we compiled a list of how much closer we would be to how many friends and family members. Then about 2 weeks before we were due to come back to Canada for the summer, a switch flicked. I knew then that I needed to come home. I couldn’t describe it as anything other than intuition.

Now, we are renting a two-bedroom house in the countryside less than 2km from my parents. I thoroughly appreciate the sense of community I so lacked. I see my parents almost every day. We have each other over for dinner once or twice a week and borrow milk and random ingredients from each other (we are a 40-minute drive to the nearest town). My sister randomly bought me a pair of pants she thought I would like. My Mom, while watching my son, baked zucchini bread as an activity and made an extra loaf to share with us. She also recently made me a pot of homemade soup when I was sick. My Dad helps us with things around the house. My siblings drop by unplanned or at short notice. We have play-dates with cousins and family BBQs. In the Summer, we spend time at the lake 20 minutes away. I got a paddle board which I absolutely love to get out on. My parents watch our son from time to time which has allowed us to get some alone time.

We even got to go to France for 2 weeks for the Rugby World Cup child-free! None of this was possible from where we were. Prior to this, we had been away from our son only twice for a total of 4 nights in 4 years.

It’s not all one-sided. I get to help out too which I thankfully now have some energy to do. I help with things like tech support, babysitting, lifts to doctors’ appointments, dinners and house cleaning for example. We also buy things for each other where we see it’s needed without expecting anything in return.

For this chapter of our lives, it feels like friends are so busy with kids and activities that it’s hard to schedule in any time together. If we are to see other people regularly, it’s far more likely if we are closer to family – at least for now.

I recently listened to a wellness podcast that said that community and connectedness are a missing link in sustained wellness and I couldn’t agree more. It’s made a huge difference to the quality of my life.

How

The move went as smoothly as it could have gone, though I like to think my level of planning had something to do with that.

I use a software called Asana to help manage big to-do lists. It’s shared with my husband so we can each work away on things and keep each other updated in one place with the progress using comments and attachments. Our move to Canada list had the following sections:

• get house ready for sale
• packing/shipping
• before we leave
• finance stuff
• after arrival
• quality of medical care research
• shopping on arrival
• house to-do (rental)

We would add to the list as soon as we thought of something else that needed to be done and keep it up to date as we went along to make sure nothing got forgotten. Coming up to the last day, I also had a paper to-do list on the kitchen counter with the last-minute stuff.

I also had a spreadsheet (of course) which had the following tabs:

• rent vs buy analysis
  • this included the total of our assets alongside various options of buying a house vs renting a house to see how much our portfolio would cover of our living expenses and how many months of the year I would have to work to cover our remaining expenses. Some example scenarios below.
  • I also kept track of the exchange rate trends and calculated what gross salary I would need to make to cover all expenses after taxes in the 2 provinces we were considering (Quebec and Ontario have very different income tax rates)
• move furniture
  • this was an analysis of what we paid for our furniture, what we thought we could sell it for second hand, what we would have to spend to replace it in Canada vs what it would cost for us to ship it
• home build
  • we also looked at the option of severing a plot from my parents’ farm to build a prefab home
• rent option
  • this looked at what rental yield we thought we could get if we rented our Irish home out instead of selling
• estimated cost of living
  • this included a few of the rent vs buy scenarios using our current cost of living in Ireland as a base and adding/taking away costs per our research and understanding of Canadian costs
• move costs
  • this included estimates on how much the move would cost us including house sale costs, shipping and flights as well as the sale of our car. This was used to help us manage cash flow as we knew we’d need some large sums available for things before the assets from the house sale were freed up

We had a few administrative hiccups getting set back up on this side but overall can’t complain. We had a very soft landing in that we had a place to stay for the first few weeks with my parents. And then when our furniture arrived, we moved into our rental.

Of course, wrapping up our life in Ireland and saying our “see you later’s” was hard and definitely had me questioning my decision the closer we got to leaving but now that we’re 5 months in on the other side I have to say it was the best decision for our family for this chapter of our lives.

Rent vs Buy Scenarios

In this section, I will go through the various scenarios we considered when looking at renting vs buying in Canada. All of the below scenarios were based on actual houses available to buy/rent in the areas we were considering. I will generalise the information without giving specific personal figures however, I will share the actual expected outcomes of each for comparison purposes.

1. Buy house for cash, invest the rest, withdraw 7.5% of portfolio per year, add on non-employment non-dividend income (tax refunds, child benefits, passive blog income), minus base living expenses.
2. Buy house with 90k mortgage, invest the rest, withdraw 7.5% of portfolio per year, add on non-employment non-dividend income (tax refunds, child benefits, passive blog income), minus living expenses (base + mortgage).
3. Buy a duplex with 70k mortgage, invest the rest, withdraw 7.5% of portfolio per year, add on non-employment non-dividend income (tax refunds, child benefits, passive blog income), add on Air BnB income for the other unit minus living expenses (base + mortgage + additional homeownership costs) minus Air BnB fees and rental income taxes.
4. Rent for 1,000$, invest everything, withdraw 6.5% of portfolio per year, add on non-employment non-dividend income (tax refunds, child benefits, passive blog income), minus living expenses (living expenses including rent would be comparable to owning as home ownership costs are much higher in Canada – higher property taxes, higher insurance)
5. Rent for 2,100$, everything else the same as option 4 except increase withdrawal from portfolio to 7.5%
6. Rent for 1,000$, spend an additional 2,500€ in rent for 3 months in Portugal/Ireland, everything else same as option 4 except decrease withdrawal from portfolio to 6%
7. Stay in Ireland, move to a house where we could be mortgage-free with assets from our current home, leave remaining assets invested, withdraw 6% from portfolio, add on non-employment non-dividend income (tax refunds, child benefits, passive blog income) minus living expenses (current minus mortgage)

The below table shares the outcomes of each of the above scenarios in terms of remaining expenses that would need to be covered through employment income.

Selling our house

We sold our house using auctioneera. They offer all the same services as a traditional estate agent but for a flat fee instead of a percentage which saved us a few thousand euro. We liked the online nature of their service and the dashboard/updates you’d get after every viewing.

We did a lot of decluttering and staging ourselves. Our house listing went live on Feb 17. We had a total of 4 group viewings with 19 people from Feb 23 to Mar 10. For each viewing, I made sure the house was spotless, aired out and staged the same as we did for the photos. On some days I even made fresh cookies so the house smelled of baking. On the evening of Mar 10, the bidding went available online and we watched 6 people make bids on our home. It finished up at 40k over asking. We went sale agreed on Mar 16. We had a condition that we needed the house until the end of June so we moved out on Jun 22 and had funds in our account from the sale on July 12.

Moving furniture

As mentioned above we were quite torn on whether the cost of shipping our furniture was worth it.

We estimated we spent around 17k on furniture and accessories for the house. If we managed to sell all of it (which was unlikely), we’d maybe stand to make about 25% of that back (4k). We’d then have to replace all of that furniture on the Canada side. We estimated it would cost us about 10k to replace what we’d need. This would not be a like-for-like replacement. As we hadn’t planned on leaving Ireland, the furniture we bought was higher quality – stuff we really liked. We’d also likely still have some things to ship as we had some sentimental items like a few baby things, teddies/toys for our son, and a wedding present that is dear to us that we couldn’t fit in a suitcase.

Our first shipping quotes were at peak due to pandemic backlogs, port congestion and strikes. They ranged from 9,500€ to 11,000€ for a SHARED 20-foot container not including insurance.

I found a site called Freightos that tracks the ticker rates for certain shipment routes. Like tickers for the stock market, there are similar ticker rates for freight costs – referred to as the FBX. I signed up to their newsletter and kept up to date on the rates for our shipment route. We used this as a basis for comparison when looking for new quotes closer to the date of our move. A year later, we got updated quotes from the existing companies and they were coming in even higher than before! It pays to shop around as we got a quote from a different company and managed to get our full 20-foot container including insurance for 7,560€.

We still had to downsize some of our furniture in order to fit everything into 20 feet and there were some things we no longer needed or electronics that wouldn’t work in Canada so we still had to sell some things and replace them on the other side on top of the shipping but it was oh so nice to get our furniture from our Irish life to help us feel at home more quickly in Canada. I think this was particularly helpful for our son’s adjustment to his new life, to have some elements of familiarity.

In terms of timing, we sold our car the morning the movers came! Our furniture was packed up and collected on Jun 22nd. We got a taxi to our friends’ house where they surprised us with a final gathering of some of our best friends for dinner and then we flew out the very next day. Our furniture arrived at our new rental on August 1st. There were quite a few forms to fill out and sign off on. One set of forms you have to have completed and signed on arrival in customs when you fly in, in order to avoid paying customs on your personal items. Then once it arrived at the port, we had to drive to Montreal to sign another customs form in order to release the goods.

Moving Money

We did a good bit of research trying to find the cheapest way to get out money moved back to Canada. As we were moving such a large sum, both the exchange rate and the exchange fees were going to make a huge difference so this was an important one.

When I first checked with a currency broker I had used in the past, they were offering an exchange rate that was 0.13 points lower than the market rate. This seemingly small number was going to cost us over 7,000$ (4,700€) in difference.

I ended up finding a company called Atlantic Money who give you the market rate and only charge a flat fee per exchange. The catch was that the transfers were limited to what our online banking would allow per day which was 10,000€. This meant I needed to make a transfer per day for a lot of days to get the full amount changed over but this also allowed us to “dollar cost average” with the exchange rate. Even with the flat fee and the number of exchanges we needed to make, the fees came to less than 100€. A far cry from the 4,700€ cut the broker was going to take.

As I hadn’t used them before I started with a small transfer of 1,000€ to make sure it got to my Canadian account as expected. Once tested, we continued on with the daily transfer until all funds were transferred. We had to prove where the money came from for anti-money laundering purposes but it was super fast to complete and get approved.

They also now have a Business account if you have a business and work or get paid in multiple currencies.

Home build

We also priced out what it would cost to buy a plot of land off my parents and build a pre-fab home.

In 2022, this was what we had estimated.

For a prefab 2-bedroom bungalow like this one, it would cost between 434,000$ (295,000€) and 487,000$ (331,000€) including site works and land.

Break-down looked like this:

Estimated cost of living

In Ireland, by the time we left, our annual cost of living was averaging at about 36,000€ with a small mortgage.

Annual expense posts here: 2022 (35k), 2021 (38k), 2020 (39k).

We mapped out a few scenarios of living expenses in Canada per below:

Of course, these are estimates and we will get a better sense of what is realistic once we’ve lived here for 12 months, which I hope to share, but for now, we had to start somewhere. I used sites like numbeo and local blogs/forums/family to get a sense of what things cost here now. Will keep you posted on how close or far off we were.

And that about covers it! It looks like a lot of effort now looking back but we were both off and I’m a good planner so it was a lot more gradual than it looks reading it all in one blog post.

In my next posts, I’ll give an update on what our new Canadian portfolio looks like now as well as how we spent our time in the almost 18 months we were both off together.

My family of three is nearing the end of our three-month mini-retirement. Both Mr. MH and myself were off work for the summer. We spent two months in Canada and one here at home in Ireland. This post goes into how we managed it, what it cost and how it went.

I contemplated not writing this post, as in the wake of the cost of living crisis, it feels a bit insensitive. But after some thought, I think different people will be at different points of their journey at different times and it’s ok to show what can be achieved along the path to financial independence should you choose to follow it.

Starting off I should say, we did not get here overnight. We are probably 15 years into our journey of getting and staying out of debt, consistently spending less than we earn and using the remainder to either pay for big life expenses in cash such as cars (albeit old), our wedding, two down payments, renovations and extended maternity leave or building up some investments such as paying down our mortgage, stocks and exchange-traded funds (ETFs)).

It’s important not to compare the beginning of your journey to the middle of someone else’s, so keep that in mind as you read on.

What is a mini-retirement?

In short, a mini-retirement is an extended break from your regular work, it can be for 2 months or even a year or more.

This will be our family’s second mini-retirement. The first was 2 months in duration in Portugal at the beginning of 2020 right before the first lockdown at the tail end of my maternity leave. You can read that series in the posts below.

Why we took a mini-retirement

The short answer is, because we felt like it and because we could.

The long answer is, the pandemic was hard, as it was for many. I hadn’t seen some of my immediate family for 3 years. My twin nephews were 1 the last time I saw them, now they are 4. There were points during the pandemic when I wasn’t sure I’d ever see them again – this may seem dramatic but my mental state was not normal at that time – actually it still isn’t but I’ll get into that later. I wanted to be able to visit and catch up without being rushed. I wanted to make up for lost time.

Second, I was and still am recovering from burnout.

How we managed a mini-retirement

You can read more about how to plan for a mini-retirement in general in my previous post, but for this time for us, we made the decision in January 2022.

Budgeting

First things first, could we afford it?

I track my expenses in detail 3-4 times a year so I have a fairly good idea of what our monthly expenses are month on month. At the moment, our monthly expenses are 3,000€/month on average.

We knew we wanted to take 3 months off and that if I went back contracting it would take 2 months of working before I would get paid again – when you work on contract, you invoice at the end of the first month and the company generally has 30 days to pay it so you have to work for 2 full months before you are paid. This meant we needed money for 5 months to get us to our next paycheck.

Simple math is 5 months times 3,000€/month = 15,000€.

Our bank balance at the beginning of January was 15k. We like to keep 10k as an emergency fund so we had 5k extra to put towards our next goal. I figured we’d be able to save the additional 15k back up by the end of my contract so I added 5k to my ETF investment portfolio in Degiro*.

I finished my contract at the end of June but had 1 final paycheck due at the end of July, so by the end of July we had built our savings back up to 26k (including our 10k emergency fund). Meaning we were saving about 2,500€/month towards this plan.

Getting off work

I was working contract work and Mr. MH was already off as a stay-at-home-Dad, so we only had to worry about getting work off for one job. In March, I told my Manager I would not be extending my contract at the end of June but that I would like to come back in October if they had work for me. I was told it wouldn’t be guaranteed but that I should get in touch a month before I wanted to come back and they would see what they could do. Worse case, I would be applying for a contract somewhere else. With the way the job market is at the moment, this was a risk I was willing to take.

Preparing to go

In terms of preparing to go, we installed a lockbox for our house along with a Ring battery operated security camera for the outside and we re-purposed the camera we used as our baby monitor to watch the back door. We told our friends and family to use our house while we were away, which was made easier by the lockbox. They kindly watered our plants when they stayed meaning we only needed to bug friends of ours to drop by twice while we were away.

The last time we were away for a long period, our car battery died which we solved in the past by taking the battery out and putting it back when we returned. We thought we’d do the same this time however since we now have a hybrid, this caused the battery to prematurely die. We have since learned that hybrid cars, especially those with stop/start functions need a special battery and for that battery to be fitted by a garage in order to sync it up properly with the onboard system. So, depending on what type of car you have, you may need to get friends or neighbours to drive your car intermittently while you are away, if gone for extended periods.

Packing-wise, due to all the baggage delays and stories of lost baggage, we only brought our stuff in carry-ons. As we are fairly minimalist and used to travelling light for the likes of Ryanair, I’d been doing some research into the best/biggest carry-on which fits even Ryanair’s size limits. I invested in this Osprey 40L backpack which I’m fairly pleased with and managed to fit all my stuff in for the 2 months. We did have one suitcase filled with baby stuff for my sister but even that managed to make it through ok.

What our mini-retirement cost

The below table outlines what we spent our money on from July-September 2022. This includes 2 months in Canada and 1 month in Ireland and the flights we purchased in March.

In total, we spent 9,741€ or an average of 3,247€/month. Adding on the additional 2 months of 3,000€ to our next paycheck, this comes to 15,741€ which is almost 1,000€ over what we had estimated.

As the flights were purchased in March, that brings our actual monthly average for Jul-Sep down to 2,625€ and our total actual spend during that timeframe to 7,876€, add onto that the additional 3,000€/month until our next paycheck and that comes to 13,876€, so slightly under our estimated actual spend for that timeframe.

Out of curiosity, when I looked at the money we spent while in Canada only (including ongoing Irish costs such as mortgage etc), the monthly average came to only 1,874€/month.

How our mini-retirement went

On the surface, we had a wonderful summer. We got quality time and catch-ups in with friends and family. Mr. MH and I had date nights and nights away on our own. We got to go to the cinema and splashed out on a fancy-tasting menu. Little MH learned to swim. We had pool time, beach time, lake time, boat time and nice weather. Little MH had lots of play dates with cousins. Mr. MH read lots of books. I made jigsaw puzzles while singing along to my favourite songs. We got to eat food we hadn’t had in years. We shared many meals in good company and ate in restaurants.

Once we were back in Ireland and back into the routine, Mr. MH and I had a few hours each day to ourselves as Little MH had started back to playschool. We went on long walks in nature on our own in the fresh Autumn air. We got to catch back up with Irish family with cousin play dates for Little MH here too.

For all of this, I am so grateful.

Digging deeper, I am still struggling mentally and physically. I am tired all the time. I don’t have the energy to do the things I want in life. Mood-wise I feel mostly numb. About a month into our time off I was frustrated with myself for not feeling more rested, even with all the support and no work, I was still running on empty. For the first month, I was obsessing, planning and analysing our next move (more on that to follow). I remember basking in the sun on my parent’s pontoon boat surrounded by family feeling nothing and being mad at myself for not being able to be present and feel joy at what should be a most joyful moment. I then vowed to stop my planning and to spend the last month being more present. This helped somewhat but not as much as I’d hoped.

Reading some other FIRE blogs, for those that had already retired, some said it took them a year to decompress from the working world. So maybe my expectations for feeling rested are too high.

Somewhere along the way, I decided I needed to take some more time to try and heal. I feel like I’ve been troubleshooting for a year and although I’ve definitely levelled off and am much more stable, I’m still numb most of the time. I do get moments of joy every day and some moments where my heart is just brimming with love and gratitude but I very quickly fall back to my baseline of numbness.

So, Mr. MH will be going back to work while I focus on getting better. I’m very lucky to be in this position and am thankful for that. Since we’ve been back, my routine looks like this:

• Wake up with Little MH between 6:30 and 7 and have breakfast together
• I’ve started taking the Revive Active energy sachets before eating/drinking anything each morning
• Get Little MH off to playschool
• Come back and exercise with either a brisk walk in nature if it’s nice or some strength training and/or yoga for 30-60 minutes
• Shower, clean the house, make the beds and collect Little MH
• Have lunch
• Food-wise, we’re following a 4-week gut health program featured in the book Fibre Fuelled.
• Putter around in the afternoon, go to the shop, library, playground, give Little MH snacks (so many snacks) etc
• Start dinner around 4
• Chill out for a bit after dinner
• Get Little MH to bed around 8:30
• Go to bed myself between 8:30 and 9 – I downloaded a sleep tracker and have been seeing that my sleep quality is very poor (very little deep sleep, awake for 1.5 hours most nights) so I have to go to bed very early if I’m to get 7-8 hours actual sleep.

I’m about 2 weeks into this routine and feeling more energized most days, not waking up as groggy. My default mood has not really improved so I will give it one more week before heading back to the GP. I think it may be a matter of going back on anti-depressants for a while and maybe getting referred to a sleep clinic.

All-in-all, I’m so grateful for having this time with friends and family. For being able to take time to get better.

I do think that as we are living and working longer, mini-retirements will one day become the norm. People will be able to take extended career breaks to enjoy life while you are still able to do things you love.

The beauty of reaching financial stability is being able to choose when to do things like this and not feeling trapped to keep going when your body says stop.

What do you think? If you could take a mini-retirement what would you do? Has anyone experienced what I’m going through and what did you do to get better?

* This post contains a referral link where I get a bonus if you sign up and use the service at no cost to you. Note investing comes with a risk of loss. Do not invest any money you can’t afford to lose.

Total spend in 2021 came to:

€38,064

This is only 4% less than last year instead of the 18.5% we had forecasted this time last year due to halving our remaining mortgage and selling our Canadian property, getting rid of that negative monthly cash flow.

Not included in this figure are the costs of our garden renovation which added to our home equity (12k), the capital costs of our “new” car (6.5k) and the income taxes we paid on our additional income here in Ireland (<1k) as the taxes are income-related expenses. Also excluded are any tax refunds we got from last years overpayments (8.6k).

Last year’s graphics were from YNAB but I converted my expense tracking to my own excel tracker template which I used to create the below graphics/reports.

Overall spend

Here is a summary of the main categories.

Food

Food became our biggest expense in 2021 (9.6k). Our grocery category (8k) includes everything you’d buy at the grocery store so can include alcohol, toiletries, cleaning products, the odd centre aisle item like small tools, toys for our son etc. Obviously, the food bought out of the house like lunches, restaurants and coffees are minimal due to COVID.

If we convert the full annual food spend of 9.6k into cost per person per week (assuming 2 adults and 1 toddler (I’ll average at 2.75), it comes to close to 67€/week/person.

This is a 23% increase from last years food spend. We got a lot more take-away in 2021 (38% or 400€ more than the previous year). Spend at the grocery store went up 18% (1,468€ more) compared to last year. We did less meal planning and more ad-hoc shops. Our son is eating more now so this could account for some of that increase. Also Mr. MH is coeliac so we spend a bit more on gluten-free pasta and bread and since Mr. MH is now the main grocery shopper and chef, we’ve been eating more meat and more red meat which is more expensive. We really did try to cut back on meat for a while in 2019 and 2020 which did reduce costs but it took a lot of effort to try and find new recipes all the time that didn’t end up all tasting the same. I found veggie recipes use a lot of the same base ingredients and eventually most of our meals ended up tasting very similar. I’d still like to eat less meat but this change has been bumped down the list with everything else that’s been going on.

Monthly bills

Monthly bills came to a little over 7k. The vast majority of our monthly bills was our mortgage (56% or 3,978€). The rest were made up of Gas, Mobiles, Electricity, Internet, Refuse, Life Insurance (for me only to cover our mortgage). Electricity was up 20% from last year (126€ more) and Gas was up 16% (139€ more) – this could be because we were away for the most expensive months in Jan-Feb 2020 in addition to rate increases. Internet was up 20% (100€ more) due to an increase in contract cost despite shopping around for intro offers.

Home

House related costs were our 3rd largest expense coming in at 5.2k. Sure, what else did we have to spend money on last year? We bought a new bed and mattress, a BBQ + supplies, picnic supplies (for all those COVID picnics meeting people outside), an awning for the garden, a humidifier and Christmas decorations etc. Our oven and hob gave up and needed to be replaced. Home maintenance was up this year too. We needed to replace a few taps and sink parts, and a roof repair for a leak as well as a few garden supplies. And the usual home insurance and TV license.

In terms of increases from last year, we spent 27% more on furniture, 45% more on small appliances and 86% more on maintenance than last year.

The joys of owning a 16-year-old home and all the appliances start to go at the same time. Something to keep in mind when looking to buy a house.

Entertainment

This category is slightly inflated by the cost of 2 rugby world cup packages, half of which we will be repaid for at some point. Mr. MH’s lifeline during COVID was sport so there are increased costs for sporting events and sports tv packages, he also got a second-hand bike. The next biggest cost in this category was sightseeing. We got annual passes to both Blarney Castle and Fota as some of the only outings we could do during lockdowns. The gadget category includes some podcast memberships, headphones, a PS4 controller and SAD lamp. The alcohol spend is only those bought directly at an off-license, the remainder is included in our grocery spend. We both play video games so spend a bit there.

Transportation

Transport costs were up from last year too coming in at just over €3,200. We paid cash for our car so have no car payment in this category. Despite not commuting to work we still spent almost €1,400 on petrol. We did have a few trips up to Sligo/Mayo and even though I am not commuting, we still drive around a good bit to various playgrounds and nature walks with our son. Even still, when we were both commuting to work, me with the car and Mr. MH on the bus, and able to drive to visit friends and family, we spent closer to 2k on petrol and public transport alone. Car repairs cost 71% more than last year as our previous car was starting to need more maintenance, part of the reason we got a new one. Motor tax was 33% more as I made a mistake paying for a full year on the old car before we traded it in which I didn’t realise I couldn’t get back. NCT was also up as we had to NCT both the old and new car.

Medical

Our next biggest expense was medical (3k), the biggest part of this was health insurance (almost 2k). We used to have cover through Mr. MH’s work and when we decided to go down to one non-permanent income, this was an additional cost we had to cover. The 2 other biggest costs were Mr. MH’s glucose sensors and GP/counselling costs.

Other

The remaining categories had a spend of 1k or less and include things like:

Weddings/Family events for a friends wedding and a 50th birthday party which we all went away for.

Work expenses wise, my biggest expense was a 49″ widescreen monitor.

Personal expenses such as clothes, shoes, accessories, Mr. MH’s vape.

Gifts/charity came out to almost 1k. This was for birthdays and Christmas and charity giving.

Goals for next year

When I did this exercise last year there were very obvious expenses that I could see we wouldn’t have this year (mortgage reduction, Canadian property costs gone). Looking at the above, I don’t see anything that really stands out.

Food-wise, we may be able to cut down on costs by getting back into the habit of meal planning and eating less red meat. Buying a whole chicken and throwing it in the crockpot is a handy/cheap 2-3 meals. Maybe we could shave 800€ off there.

Hopefully, we won’t have anything else crop up in terms of home maintenance and I don’t think we’ll have any big furniture costs again for a while so that might bring us down another 2k.

I also don’t intend to spend any more on work-related expenses so that’s another 1k.

Car related expenses should also be close to 800€ less as we won’t have the costs from getting an old car ready for trade-in.

That would bring us down to 33,400€. However, we do have travel plans this year so that may cost 2,300€ more than last year, bringing us back up to 35,700€.

My goal for 2021 was 32k. I was off by 6k. My biggest oversight perhaps was the amount of additional food costs my son would add to our bill, and inflation.

This year I’ll target 36k.

Early retirement impact

In terms of early retirement planning, I think I need to be more realistic in my forecasting on cost of living, and subsequently the amount of money we need invested to cover those costs.

Our latest projection was to reach financial independence in 11 years to cover an annual cost of 24k (once our mortgage is paid off) and spending 30k/year from now until then. After increasing the cost of living during accumulation to 36k and increasing cost of living in retirement to 32k this brings our estimations up to 14 years on 1 part-time income. If we go up to 2 full-time incomes once our son is in school, this may reduce further. Still, retiring at 50 and 54 as a worst-case is not a bad goal to have.

If you’re interested in calculating your own time to retirement, I have a questionnaire format excel template in my paid member’s area.

Do you really need a car?

This wouldn’t be a very good financial independence blog if I didn’t pose this question first. Do you really need a car at all? When our car started to become less reliable and cost more money to maintain, we asked ourselves, could we get away with not having a car at all? Or perhaps if you have 2 cars, can you do with only 1?

Looking back at our expenses since moving back to Ireland in 2014, it has cost us on average 350€/month to own 1 car between us. That includes car, petrol, tolls, parking, NCT, taxes, maintenance and license costs.

As we live near the city centre and could walk/bus/train to main amenities like grocery stores, schools, playgrounds, work etc could we get away with alternatives to owning a car like:

• An electric bike/scooter with child carrier
• Renting a car for longer journeys
• Signing up for car-sharing like GoCar or Fleet

For us, we do a lot of longer journeys to Mayo and Dublin and do regularly drive around to different playgrounds and sightseeing with our son so it felt like the cost and hassle of renting a car or car-sharing for each of those journeys on top of the public transportation costs would not be feasible for the time being, nor would it be cheaper. Maybe once our son is older we can make the switch but for now, we feel we need 1 car.

But it’s worth asking yourself the question and thinking outside the box if you can give it a go. If you do need a car then read on.

Determine your search criteria

Do some soul searching about what you want out of your new car.

For me, my main reason for upgrading our car was reliability for as little cost as possible. I also wanted the new car to last us for another 5-6 years minimum before having to dish out again. Your core criteria may be different but it’s important to keep coming back to them when you need to bring yourself back down to earth.

Cost

Budget

How much are you willing to dish out? Like any big purchase, getting a new car is exciting and it can get very hard to stop your emotions from guiding your purchase. If you have very clear criteria for yourself it can help you to stop getting carried away.

We always try to live beneath our means and only buy cars in cash. If we don’t have the cash, we don’t buy the car. Getting loans for things like cars is very easy to do these days and can make it very hard to keep spending in check. Just because you can “afford” it, doesn’t mean you should get the most expensive thing you can. It can end up costing you way more with all the administration and interest.

What we try to aim for is buying a new car every 5-6 years for around 5,000€-7,000€. This means we need to put aside 833€-1,400€/year (or 70€-117€/month) so that we have enough to pay for the new car in cash when it’s time.

For us, financial security is really important and so when we frame a big purchase in this light, it helps us keep our spending down. If you spent 20,000€ on a car, and you typically save/invest 20,000€ a year, then that new car purchase will mean we need to work for an extra year before reaching financial independence. If you feel that is a reasonable exchange of your limited life, then it’s worth it but if not, it can help you prioritise your spending.

If you’re not focusing on your time to financial independence, another way to look a the purchase is how many hours of your life will you spend working to pay for this car? Figure out your real hourly wage after taxes including things like commute time and cost, work clothes etc – take the cost of the car and divide it by your real hourly wage. This shows you how many hours of your life you will spend at work to pay for this car. A good calculator for this is here.

For example: If you earn 50,000€ for 38hours/week for 48 weeks/year – you take home about 36,800€. Say you spend 30 minutes getting ready each morning and spend about 50€/month on new work clothes. You spend 1 hour a day commuting and about 70€/month on fuel (for work alone). You buy your lunch for 4€/day in a subsidised canteen. This means your real hourly wage (including the additional costs in time and money to work) comes to 13.37€. To buy a 20,000€ car you will spend 9.8 months working to pay for it. Imagine going to work every day for almost a year JUST to pay for your car. If you keep the car for 10 years that spreads it a bit more so that 1 entire month for each of the next 10 years will go towards paying for that car. Converting costs to time really helps put things in perspective as it truly is the most limited resource.

Comparison

It also gets hard to compare costs when you have multiple factors to consider. How long can I expect this car to last? How much is the motor tax? How much is the petrol/diesel/electricity? How do these compare to keeping my current car?

To help compare apples to apples, I came up with a calculator that takes all of these criteria into account and boils each car down to an average monthly spend so you can compare the total cost of ownership side by side of each car you are considering. You can find this in my paid member’s area but it’s not hard to calculate yourself in a simple spreadsheet. Again, this helps to take the emotion out of it somewhat when you can see the true cost over the lifetime against all options. Read on to see an example of our full search.

Mileage

To translate mileage into search criteria I took our average annual mileage of 15,000km and multiplied that by 6 years. That comes out to 90,000km. So I would want a car that I could get another 90,000km out of without needing major repairs to keep it going. The mileage range to put in your search criteria will differ depending on the brand of car.

From our experience, we feel that 200,000km is a reasonable mileage to get out of the likes of a reliable brand like Toyota and Honda without needing any major repairs. This may be more or less for other brands, you will have to research car buying guides for a realistic figure for whatever car make you are interested in.

So if we take 200,000km minus 90,000km, that means we’d need a new car with at MOST 110,000km on the clock.

Year

Putting the max price and max mileage criteria into DoneDeal came back with a range of cars from 1994-2017. We felt for the reliability and lifespan we’d be looking for we’d want at least a 2010 so we added that to the criteria.

Make/Model

Seeing the cars that came back in the search we tried to refine our search further again based on our preferred make/model. I’ve personally only ever owned a Toyota and have found them to be very reliable requiring very little maintenance. My perception of Honda comes a close second. I then filtered for Toyota and Honda to further refine the search.

Fuel type

Being concerned for the environment, we really tried to make this next car an electric one but after much research, we felt the used car stock in our price range at the moment does not have the distance range we would be comfortable with. As we do regular trips to Dublin/Mayo with a 3 year old, we weren’t prepared to need a 20-40 minute stop to charge up once or even twice on the already long journey. We felt that by the time we need to trade up next time, the battery charging technology or infrastructure will be much farther along and the range of the batteries will be much better too so we are holding off another while. As a compromise we favoured Hybrid’s in our search so prioritised those in the filters. Petrol would have been our next choice and then Diesel.

Further research

In the end we broadened and narrowed our search criteria out of curiosity for my calculator. It ranged between 2009-2019 and 3,990€-18,900€. From an average of saving 25€/month compared to our current car for a 2018 Kia Soul EV with 32,000km to costing 663€/month for a 2013 Yaris Hybrid with 146,000km.

We looked at Honda’s, Toyota’s, VW’s, Ford’s, Kia’s, BMW’s and Nissan’s.

Once we boiled it down to a handful we dug deeper into the car reports for that year and make. We watched car buying guides and reviews to see if there were any recall’s, safety concerns or other considerations. I even joined a Facebook group for BMW i3’s in the UK to get an idea of what trouble’s owners are experiencing. Mr. MH talked to our mechanic about their take on the model we were considering as well.

The cheapest options per month were the electric vehicle’s where we would actually save money per month (between 11€ and 25€/month) compared to our current car ownership costs but they came with a sticker price of between 17,500€ and 18,900€ which we weren’t prepared to pay this time around. Also as mentioned above, we weren’t ready to commit to 100% EV due to lack of range. The BMW i3 with range extender was a tempting compromise but our additional research into them ruled them out as they can be expensive to fix, which was a strike against my main reliability/low effort criteria.

The next on the list was the Honda Fit Hybrid at a cost of 18€/month on average if we kept it to 200,000km or 8.2 years. This is the one we ended up going with although on the day we were going to collect it, Mr. MH got reading up on the expected battery range and found that we could likely only expect to get 160,000km out of it (180,000max) and replacing the battery would be too costly at that point, so that brought our estimated average monthly cost to 51€ as we could only expect to get 5.5 years out of it.

Detailed research

Here is a list of all the cars we looked at from cheapest monthly cost to highest monthly cost.

The savings were based on our current road tax of 358, current annual petrol costs of 1,596.

We estimated the savings of an EV would be 100% of the 1,596/year (though this should probably have been lowered to 95% assuming electricity will cost something) and 25% savings of the 1,596 for an older Hybrid. From our reading it was optimistic to expect 30% savings in a Hybrid so we took 25% to be conservative.

Now that we have our Hybrid we are seeing about 31% savings (getting 725 km per 40L tank vs 500km in our old Vitz) so that brings our cost per month back down to 41€ if we keep it for 5.5 years.

Expected mileage for petrol or EV was 200k while Hybrid were reduced to 160k.

Japanese import considerations

Low mileage but tired engine

If you’re looking for the above criteria, you will find a lot of almost brand new looking older import cars from Japan with very low mileage for the year. There is a reason for this:

In Japan it is very costly to own a car older than 3 years old due to their high cost of emissions certifications. Ireland is one of limited number of right hand drive counties that they can export these to when no one in Japan wants to pay the high costs of owning them.

The mileage is also low because it takes them much longer to get short distances. So while the mileage is low, the engine may be tired. A bit like you measure tractor use in hours rather than miles. When you are considering the longevity and how may years you may get out of a car, you’ll need to take this into consideration. For example: A non-import Toyota may last 300,000-400,000km but an imported Toyota may only get 200,000km before they start causing you trouble.

Insurance for imports

It can be hard to get insurance for Japanese imports because the replacement parts are not easy to find if needed. Be sure to check with your insurer first before your purchase the car. We have found only Liberty or Aviva will even quote for Japanese imports and you cannot fill out quotes online as they do not have them in their databases so makes shopping around each year more difficult or even pointless. Luckily we have found Liberty to be fairly competitive anyway so we haven’t found sticking with them to be painful from a cost perspective.

Higher spec

Still, we like the imports because the interor’s are impeccable and the spec is typically higher (tinted windows, automatic transmission, windows and mirrors etc). For our last car for example we had a 2005 but it was equivalent to the 2008 Irish models.

Radio limits

The other weird thing is that the radio stations in imports are limited to a different frequency so if you don’t get a range extender/adaptor you will be stuck listening to RTE radio 1 – not all bad as if I hadn’t had this limitation I likely wouldn’t have discovered FIRE when I did as it was an interview on that station where I first heard Kristy from Millennial Revolution talking about their experience retiring early.

You can get radio adaptors relatively cheaply and if you get the car from a dealer, sometimes they will convert the radio/console to an Irish one. Ours put in an android console which catered for the Irish radio stations.

Toll card reader

In Japan, they have electronic toll car (ETC) readers in some of the newer cars. If you don’t have a card in the reader or don’t have credit, when you start the car, there is an audio recording in Japanese that will play. These are wired into the car so you will need to get it removed by a mechanic if you don’t want it to sound every time.

Reversing beeping

In both of our imports, when you put the car in reverse, it would beep inside the car. The wires for this were very deep in the car so could not be disconnected easily and was quite annoying. The newer car still has the beeping but it’s a much more pleasant tone and volume.

Irish FIRE event

In other news, there is an Irish FIRE event coming up on Thursday Sept 16 at 5PM for 4 hours. Speakers include Irish FIRE aficionados and even the godfather of the FIRE movement JL Collins. Get the tickets for 10€ here (50% off) using promocode MMH50. You can access the recording for 90 days if you can’t attend at the time. I’ve presented at one of these in the past and the time and effort that goes in to just 1 presentation is massive so the 10€ or even 20€ for the tickets is a steal. These events are great inspiration to keep going and keep thinking outside the box on your own financial independence journey!

Financial independence in the context of this post refers to building a portfolio large enough that you can withdraw 4% per year to cover your annual living expenses meaning you no longer need to work for money.

I should also start by saying that the maths behind deciding whether to rent or buy is only one part of the equation. Owning your own home is a very personal choice and allows for much higher levels of customisation and control but what I want to demonstrate in this post is that owning your home is not a requirement to achieve financial independence.

Also to note that if you are not great at saving then a mortgage can nearly be a forced way for you to grow your net worth and reduce your cost of living over the long term. If you are good at saving though then the rent vs buy debate can start to be more comparable which I will demonstrate below.

General Assumptions:

• Jointly assessed couple earning 100,000€ combined (68,609€ take home)
• Couple is 36 and 37 with kids
• Annual living expenses without accommodation: 36,840€ including childcare averaged at 900€/month for the full time to FI, this is averaged out over the long term to include multiple kids in creche, school and college over the years.

Buy assumptions:

• Purchase costs
  • An average house price of 400,000€ – the average between North and South Dublin prices as per Daft’s latest house price trend.
  • First time home buyer scheme with 10% downpayment of 40,000€
  • Other purchase costs including stamp duty, legal fees, valuation, engineer estimated 8,600€
  • Furniture costs: 10,000€
  • Total outlays: 58,600€
• Ongoing costs:
  • Monthly mortgage payments: 1,341€ (16,088€/year)
  • Mortgage rate: 2.75% over 36-year term
  • Estimated annual homeownership costs: 4,750€ including home insurance, refuse, mortgage/life insurance, local property tax and repairs/maintenance/upgrades (estimated on average at 3,500€/year)

Total annual expenses: 57,678€

Total annual savings: 10,931€ post-tax or 15,304€ pre-tax in a pension

Couple decides to max pension contributions and saves 15,034€/year towards financial independence

• Pension details:
  • 100% allocation rate
  • 1% annual management fee
  • 0.20% annual fund mgmt fee
  • 10% annual growth
  • 1.9% inflation
• Note that to get this kind of pension performance and fees is not typical, it would require a very hands-on approach to ensuring the underlying funds are high performing and that the fees are low and the allocation rate is high. Not included are any commissions, bid/spread offers or monthly administrative charges which can also be charged.

Rent assumptions:

• An average rental price of 2,166€/month (or 25,992€/year) – the average between North and South Dublin prices as per Daft’s latest rental trend report.
• Invest the money they would have put to a downpayment into an ETF portfolio: 58,600€
• ETF portfolio earns 8% per year and 2% in dividends which are reinvested, 0.19% management fees, and 1.9% inflation
• To maximise their savings the couple decide to invest the rest in a pension with the same performance and fees as the “buy” scenario

Total annual expenses: 62,832€

Total annual savings: 5,777€ post-tax or 8,087€ pre-tax in a pension

Time to Financial Independence: Buy

Using my FIRE calculator (which you can access on my paid member’s area), let’s see how the buy scenario plays out.

As they will not be overpaying their mortgage and maximising their pension instead, the annual expenses they will require to be fully financially independent will need to include their mortgage costs as they reach FI before their mortgage is paid off. They will no longer have childcare as their kids will be grown.

Annual expenses for FI: 57,678€ minus childcare 10,800€ = 46,878€

Time to FI if buying and investing: 29 years

So this option will take the couple 29 years to reach financial independence. 7 years after that their mortgage will be paid and they’re portfolio will be larger than they require, so they can reduce their withdrawal rate which will even further increase the chances of their portfolio not running out. This option leaves them with a higher net worth in the long run which could result in a better estate for their kids.

Time to Financial Independence: Rent

Again using the calculator, let’s see how this scenario plays out.

Keeping in mind their annual living expenses once financially independent will no longer include childcare so their 62,832€/year will go down to 52,032€/year.

Time to FI if renting and investing: 32 years

So renting and investing compared to buying and investing with these assumptions only makes a difference of 3 years.

Considerations

Neither scenario looks at the option of renting out a room in their home for additional income/savings to put towards investments. If they didn’t have kids or even once their kids are moved out they may want to bring on a lodger then OR even downsize and reduce their time to FI even further.

Once they get closer to FI and no longer need to work for money, they could decide to sell their home or rent/buy elsewhere in the country for cheaper and reach FI sooner.

Another option I didn’t look at in the buy scenario is to pay off the remainder of their mortgage with the tax free lump sum from their pension once they reach the access age, which MAY speed up their time to FI as their annual expenses would be reduced at that time.

I did not take into account any capital growth of the property as that is hard to estimate over a 30-year term and could go either way, though generally over that time frame it would go up potentially giving the opportunity to sell at a higher price and use that money to buy elsewhere in the country for cheaper and either reinvest the gains or buy a holiday home if that’s what they wished.

All this to say that if you want to become financially independent and are committed to investing, it doesn’t really matter if you rent or buy. Even in Dublin at current average rental and house prices.

If you work at fine-tuning your expenses to keep them low while not impacting happiness and investing what you can, when you can, you will reach your goal.

Keeping expenses low in the context of buying a house also means not buying a house outside of your means which is another post entirely but you can check out some of my own house buying tips here.

If you want to weigh up your own scenario’s with your own figures, my FIRE calculator is a great tool for comparing various options on your own path to financial independence. I’m always open to feedback and try to incorporate updates once a month to keep providing value.

Charitable giving in religion

The first piece of this puzzle came to me on a financial independence facebook group. A muslim member of the group was asking about how the concept of zakat fit in with reaching financial independence.

Zakat is a religious duty for all Muslims who meet the necessary criteria of wealth to help the needy. It is a mandatory charitable contribution, often considered to be a tax. Zakat on wealth is based on the value of all of one’s possessions. It is customarily 2.5% of a Muslim’s total savings and wealth above a minimum amount known as nisab.

The member of the group was trying to figure out how financial independence is possible while still following zakat. Their interpretation was that they would need 2.7 million in investments to cover their family’s living expenses of 40,000€/year as well as to pay the 2.5% to zakat if they were to use the 4% safe rate of withdrawal. For them, this means they will never reach FI in their lifetime.

A very interesting discussion followed.

Some compared this to tithing in Christianity which says to give 10% of your income to the church/charity.

One reader said that they personally try to look at the spirit of the law and the intention/culture at the time it was written. The spirit of the law was to look outside yourself and help those in need. When that law was written, the culture likely didn’t have taxes to the extent we have now. Today, part of our taxes go towards the poor through social assistance, welfare and disability programs as well as to education and recreation programs. If the government is collecting from you to give to the poor, could zakat be reduced to 1% for example. They also asked that if someone is volunteering and giving in time in lieu of money how does that play out?

There were many more ideas shared on how to interpret the spirit of this law if you want to read the full thread here but this concept sat with me and then I was presented with another piece of the puzzle.

Why don’t we donate more to charity

I know someone who is a nurse in the COVID ICU ward and I heard morale was very low just after Christmas when they were inundated with very sad cases. I wanted to do something to make them feel more hopeful so I ordered them a food hamper as a small token of appreciation. They were so touched and reciprocated by sending us some books for our son as I had mentioned we were sorely missing the library for having to re-read the same books at bedtime over and over and over. They also included a book for me. I never would have read or bought this book on my own but when offered it, it seemed interesting and ended up being really good.

It’s a book by an Irish professor called “Never mind the bollox, here’s the science – A scientist’s guide to the biggest challenges facing our species today”. It covers topics like free will, the anti-vax movement, the cost of medicine, dieting, depression, drug legalisation, gender differences, racism, climate change and so on. It includes a bit of history as well as a scientific viewpoint on each topic based on fact and scientific studies. Not one bit of fake news, so refreshing.

One chapter asked “why we don’t donate more to charity?”. It talked of various motivators for people to donate to charity. One study found that 85% of donations were made “because they were asked”. Another study found motivators to include:

• trust in the charity
• the need to help others
• to contribute to a cause important to them or someone they know
• to get a tax break
• to look good to other people

It also gave some very stark stats demonstrating how badly divided the world is (and perhaps always has been) when it comes to wealth:

• As it stands half of the world’s net worth belongs to 1% of the world’s population
• The collective net worth of the world’s poorest half (3.6 billion people) is equivalent to that of just eight of the world’s wealthiest men
• The top 10% of adults hold 85% of all the wealth, with the other 90% holding the remaining 15%

It covered how most of the super-wealthy actually do a lot of good with their excess cash through donations and philanthropy but that the decision on what cause to donate to is left up to individuals and what might be important to them personally. This spreads the wealth ineffectively.

More than half of billionaries are involved in philanthropic giving either through organisations that they themselves established or by other means. 35% of them have their own charitable foundations.

66% of billionaires give towards education (scholarships, educational support, outreach programs and teacher training) with

• 29% of all billionaire donations going to education
• 14% goes to healthcare
• 10% goes to arts, culture and sports
• 8% goes to environmental issues and
• 5% goes to religious organisations

Enter taxation

While it’s easy to complain about our governments wasting taxpayer money where money is seen not to have been spent effectively, it’s also important to look at the bigger picture and see what our taxes actually pay for.

First let’s see how much of our government’s revenue comes from which taxes.

In 2016 (I was too lazy to dig out a more recent report), 31% of the annual government revenue came from income taxes including USC, 21% came from VAT, 14% came from PRSI, 11% came from corporation tax and 9% came from excise duties. Only 1.4% combined came from dividends and CGT.

Looking at the 2020 Ireland Expenditure Report the country had 70 billion to spread across various departments. Below is the breakdown by department for all expenses of 2% or above.

• 32% went towards employment affairs and social protection
• 28% went to health (twice as much as the billionaire donation trend)
• 17% went to education and skills (12% less than the billionaire donation trend)
• 7% went to justice

Below is the detailed monetary breakdown per department including core and capital expenses.

Core expenses is money spent by the government on a regular or ongoing basis. The majority of government core expenditure involves the day-to-day provision of essential public services. Operating costs and wages for public sector workers account for a large portion of government core expenditure.

Capital expenses are ‘once-off’ projects or on infrastructure that will have long-term benefits for the country. Infrastructure refers to basic facilities, structures and services needed for the country to function including water, power lines, transport, communications systems, schools and hospitals.

This might start to sound familiar for anyone that’s ever played anything like Sim City or Tropico.

If you’re interested in the detailed split for each department you can check out the related sections in the full report. To give an idea of what each department pays towards:

Employment and Social Protection

• old-age pensions
• working-age income support
• working-age employment support
• illness, disability and carers
• child benefits
• jobseekers’ benefits
• supplementary payments

Health

Core expenses include:

• public healthcare hospitals and services (day to day running costs of hospitals and healthcare facilities eg: staff wages, buying medicines, light and heat
• primary and community services
• mental health services
• disability services
• services for older people
• palliative care
• health and wellbeing initiatives
• ehealth
  • electronic health records
  • infrastructure upgrades for national systems such as national medical lab information system, medical oncology clinical management system, national integrated medical imagining system

Capital expenses include:

• building new hospitals
• buying new equipment and ambulances

Education and skills

Core expenses include:

• expenditure to enable schools and colleges to operate eg: teachers salaries, light, heat and maintenance of school buildings
• national training fund
• higher education
• skills development

Capital expenses include:

• building or extending schools
• buying furniture and ICT equipment for schools

Justice

Expenditure to ensure our legal and judicial systems operate, e.g. judges’ wages, garda wages and operating costs of prisons.

Agriculture

Expenditure to help farmers and ensure the sector is maintained, e.g. income supports to farmers and funding for a wide variety of rural development schemes.

Defence

Expenditure to maintain defence of our country, eg: wages to members of the defence forces and civilians working for the sector, maintenance of facilities, training costs, etc

Transport and tourism

Money spent on maintaining our existing transport systems as well as providing funding for tourism promotion agencies such as Fáilte Ireland.

How to feel better about taxes

The book ended the chapter talking of the role of taxation.

Instead of the approach taken by most of the super-rich, which is to avoid taxes as much as possible to grow their wealth well beyond what they could ever spend in a lifetime, then to turn around and give most of it disproportionately to charities of their choosing, why not pay taxes to a government who democratically decide how best to distribute that money in the best interests of the country that you are living in?

Imagine how much better off we’d all be if corporations did not have ways of avoiding taxes? If the government had more money from taxes, could we live in a community with universal basic living income for all? Which has a whole range of benefits from better work conditions, fewer working hours, more time with family and friends, less money stress allowing people to be more creative and innovative to solve big world problems like climate change, gender inequality and racism for example.

While I’ve always had it in the back of my head, that taxes pay for our infrastructure and services, it never really made me feel better about handing my money over to the taxman but when I think about the bigger picture and of the path to financial independence I feel like I’ve had an aha moment.

What is the path to financial independence?

1. Keep your expenses (and taxes) as low as possible without compromising happiness
2. Invest 50%-80% of your income for 10-15 years
3. Have 25 times your annual expenses invested to cover an annual withdrawal of 4%
4. Reach financial independence and spend your time as you wish which could include earning even more income if you chose to continue working on projects that interest you
5. If you continue earning once you’ve reached FI like I intend to do, it means I will have more than enough money to remain financially secure and continue to build wealth beyond what I need to sustain my family until death.

What will I do with that extra money that I will possibly never fully spend? Will I donate to a charity of my choosing? Will I leave it all to my kid?

Personally, I’m not looking to build a legacy. I want just enough to be financially free to spend my time as I wish without worry of money and eventually to be able to make a contribution to the world and my community by advocating for financial literacy and security for all. I hope to impart financial literacy to my son so that he can build towards his own financial freedom. I do not want to hand it all to him as I think it’s important to instil a good work ethic and self-sufficiency.

So if my end goal in financial independence is to have more time to contribute more value to society (remember maslow’s hierarchy of needs?), why not contribute to society along the way in the way of taxes?

Instead of trying to avoid or optimise paying taxes as much as possible on the way to financial independence, pay as I go knowing that a good portion of those taxes is going to those less fortunate than me. Paying more taxes along the way may take me a bit longer to get to full financial independence but I’m not going to feel angry or annoyed when paying my investment-related taxes going forward and instead look at it as a way to give back to the community I’m living in. It’s actually been a really liberating change in viewpoint.

What do you think?