Jonathan Chevreau is a long-time financial columnist, blogger, author and speaker as well as CFO for the Financial Independence Hub, which is North America’s portal to Financial Independence. This summer he will be publishing his 10th book, Victory Lap Retirement (co-authored with Mike Drak).
We recently asked him a few questions about the perks of financial independence and retirement. Here’s what he had to say:
How did you become so passionate about financial independence?
I’ve been a financial journalist since 1984 and decided to write a personal finance novel in 2008. I came up with the title Findependence Day, merely by contracting the phrases Financial Independence and Independence Day. This led to a website (FindependenceDay.com), a U.S. edition of the book (Trafford.com 2013), two summary Kindle ebooks (A Novel Approach to Financial Independence, U.S. and Canadian editions) and most recently the portal, the Financial Independence Hub (aka Findependence Hub).
How would you define financial independence?
Findependence occurs when all sources of passive income exceed your baseline monthly expenses. At that point you may choose to keep working but it’s for “fun” money and because you want to, not because you have to.
What are the benefits of financial independence?
Freedom, options, flexibility, peace of mind, the means to pursue your innermost dreams.
Where do we start when trying to achieve financial independence?
Based on the human financial life cycle, most of us start our financial lives with student debt or credit-card debt, so the first step is to be frugal enough to live below your means and apply the surplus between earned income and expenses to paying off debt: first high-interest consumer debt (usually credit cards) and ultimately mortgage debt. Once debt is gone, you continue to live below your means and now apply the surplus to building wealth.
How does retirement look when you’re financially independent?
We have a name for retirement once you have reached financial independence: Victory Lap Retirement, which is the title of a book I’ve co-authored with Mike Drak that will be published in mid 2016. So Findependence Day is the finish line, Victory Lap Retirement is what happens once you reach that milestone: a post corporate or post employment “Encore Career” in which you pursue life goals you may have put aside when raising a family and still building wealth.
How do you think people should change the way they plan for and look at retirement?
I think the term “retirement” itself should be retired! We need to consider that healthier lifestyles and medical breakthroughs may add 10 or more years to our lifespans that we may not have factored in when we first began our working careers. We should plan NOT for retirement but for longevity and create a 20-year post-corporate “Victory Lap” plan for a new stage of life between traditional corporate careers and what used to be called Full-Stop Retirement.
What are the biggest mistakes we make when planning for retirement?
Underestimating how long we may live, underestimating the financial resources required in an era of declining corporate pension plan coverage and record-low interest rates. Failing to realize there’s more to retirement than having enough money to live on: we also need purpose, social interaction and a reason to get up in the morning.
How is the concept of retirement evolving? What do you think it will look like in the coming years?
As outlined earlier, I prefer the term “Financial Independence” (aka Findependence) to Retirement. While Findependence is a prerequisite for retirement, you can be financially independent and NOT retired: in fact, the earlier in life you achieve Findependence, the better. Once you have achieved financial freedom you can embark on a new phase we call the Victory Lap, or Victory Lap Retirement.
What are your favorite resources for people who want to approach financial independence?
There are lots of good web sites and books. Some flagged by the Findependence Hub are the Retire by 30 website, Mr. Money Mustache; RetireEarlyLifestyle.com; RetireHappy.ca and many more.
The U.S edition of my financial novel, Findependence Day, contains an extensive bibliography of books, such as Your Money or Your Life. That bibliography is also available for U.S. $2.99 in the U.S. edition of the ebook, A Novel Approach to Financial Independence.
Learn more strategies for planning your “Victory Lap”.
Or, plan your own financial independence with the NewRetirement retirement calculator.
It is an easy to use tool that gives you really great information.
