Millennial Revolution – Denouncing the Cult of Homeownership

Mad Fientist: Hey, what’s up, everybody? Welcome to the Financial Independence Podcast,
the podcast where I get inside the brains of some of the best and brightest in the personal
finance space to find out how they achieve financial independence. On today’s show, I’m excited to introduce
Kristy and Bryce from Kristy and Bryce are Canadian. They took the world by storm when they challenged
the cult of home ownership. Especially in Toronto, it’s a big deal up
there. Everybody seems to be buying houses and the
prices are getting crazy. But rather than do that, they used their savings
instead to retire. So now, they’re retired in their early 30’s,
and they’re traveling the world. That would not have been possible had they
just done what everyone else seems to do in Toronto, and that is sink all their money
into a house and then spend the rest of their lives working to pay that off. I’m looking forward to diving into their
story. So without further delay, Kristy and Bryce,
thanks a lot for being here. I appreciate it. Kristy: Glad to be here! Mad Fientist: So, Kristy, you’re FIRECracker. Bryce, you’re Wanderer. I just want to put the link of those two up,
so people from your blog know who’s talking. Is that right? Kristy: Yeah, that’s right. Bryce: Yeah, that’s awesome. Mad Fientist: Good! So, where are you guys at? Kristy: So, right now, we’re in Chiang Mai,
Thailand. And we’re staying in Thailand for the next
two months. So, we’re chilling out in Chiang Mai, and
then heading out to check out the beaches. Mad Fientist: Nice! Where, what beaches? Kristy: So, Ko Lanta has actually been our
favorite because it’s more low key. The beach is not too crowded. So that’s the main one that we’re going
to be checking out. Bryce: And after that, down south Vietnam,
Cambodia. Just kind of wherever the wind takes us, that’s
where we go. That’s basically what we’re looking at. And I got to say, it’s pretty awesome. Mad Fientist: That’s awesome. So, how long have you been on the road? Kristy: About a year now, after we quit our
jobs back in 2015, we’ve just been traveling around the world. And then, every now and then, we’ll just
go home and visit our family. But mostly, we’ve been bouncing around countries. We started off in the States, then we headed
off to the UK. We bounced around in Europe. And then we came to Southeast Asia. Bryce: Yeah, there’s this misnomer that
when you start traveling, you kind of get it out of your system, and then you say, “Okay,
now I’m done. I guess I’m ready to settle down.” And I’m sure you can attest to that. That does not happen. Once you start, you just can’t stop. Mad Fientist: That’s awesome! So you guys, there’s no end in sight to
the traveling? You guys are just planning on bouncing around
for the foreseeable future? Kristy: Yeah! As far as we’re concerned, that’s a pretty
awesome life right now. So we’ll continue that trip. Bryce: What we actually found when we started
doing that, it was really just supposed to be, “Let’s travel for a year because we
never did that and because we’re retiring now.” But then what we found was that when we came
back from our first year-long kind of thing, we looked at our expenditures, and then we
found that traveling around the world actually costs about the same as staying in one place
in North America. Life is actually very, very expensive in North
America. We’re from Canada. But people from the States can also attest
to that. When you go out and you live like a local
in all these other kinds of countries, especially when you average down countries— In Eastern Europe and Southeast Asia, you’ll
find that the cost of living is way lower out there than when you’re just staying
still. So then you start asking the question, “I
could travel around for the same price as staying in one place. Why would I stay in one place?” Mad Fientist: Right! No, that’s a great point. And especially if you’re still earning some
sort of income or a little residual income from some old side project or something, you’re
earning money in dollars, and you’re not having to pay taxes because you’re not in
the States—or in Canada, I’m assuming you have something similar. Canada doesn’t tax citizens who live abroad. The State does. So you don’t have to worry about that, right? Bryce: Right, right. Before we left, we published a children’s
book. So, our publisher is earning American dollars,
a small amount of American dollars. But then we changed that into Vietnamese Dong. You just end up living like a king because
it’s like, “Wow! This is so much money here in Southeast Asia.” Mad Fientist: Oh, it’s fantastic. So yeah, give people an idea of how much you’re
spending in Chiang Mai because that’s one of the cheapest places and it’s a fantastic
place to live. So yeah, how much are you paying in rent and
food and things? Kristy: Yeah, it’s amazing! I mean, this condo that we’re staying in
right now, it’s got a swimming pool and it’s pretty modern. We’re only paying $19.50 a day. You would never be able to find something
like that with pool back in North America. The weather is amazing. We don’t have to worry about seeing a snowflake
which is something that we did not like when we were in Canada. And the food is ridiculous! Every time we go out to eat, it’s like a
dollar, two dollars. We never had a meal that cost more than CAD$5. It’s just ridiculously cheap. Bryce: And again, this is all Canadian dollars. So when we translate that to US, it’s even
lower comparatively. Kristy: Yeah. Mad Fientist: That’s awesome! So, let’s take a step back. We’re getting ahead of ourselves with all
these traveling. Tell a little bit about your background and
your story. Kristy: So, how we started this whole journey
was back in 2012, we are actually trying to buy a house. In Toronto—I don’t know if you know, but
in Toronto, the housing market has been pretty crazy for the last decade. So, in 2012, at that time, we have been married
for two years and we were thinking, “Okay, the housing market is crazy. It’s really expensive. We have to save a ridiculous amount of money
to put a down payment because it’s going to be very competitive. And at that point, we have saved up $500,000
because we have been working like crazy in savings because we knew that we needed as
big of a cash […] as possible to get into the market. And it was around this time that we started
to realize (as we look at the different houses) different options that there’s actually
a lot of people trying to flip houses for money. We saw this dilapidated house on our street
that was basically fixed up in less than a month. They did not put any effort into making it
last. They just basically wanted it to look nice
and then sell it as much as possible. So, it was a dilapidated house that the builder
bought for $500,000, flipped it in less than a month, and then sold it for $800,000. And when we went to the open house, we saw
that the floor boards weren’t even, and then they just did a very rushed paint job. We knew that it was not going to withstand
the stand of time for sure. It had eight bids. And we got into a bidding war so very quickly. So, at that point, we started to realize,
“This is kind of a scam. I don’t want to be in the housing market. Everyone is just going crazy and losing their
mind. They’re not even looking at whether it makes
sense to get into the market. You just want to rush right in.” So then, it was around this time that we thought,
“Maybe we can go a different way. Maybe we don’t need to be struggling and
being stressed at our jobs just paying off a mortgage. Maybe there’s something else we can do.” So, it was around this time that we discovered
Money Mustache and JL Collins, and we decided, “Hmmm… financial independence. That sounds really interesting. That might be a different path that we’ll
be able to take.” And at the time, I was really stressed out
at my job, and there were rumors of lay-offs as well. So, we thought, “Let’s try this. Let’s try questioning the status quo, not
buying a house, and instead, saving towards financial independence.” So, that’s what we did. So, from 2012, we started investing. And then, we grew our nest egg from that point
on until 2015. We actually ended up growing our portfolio
to a million dollars. And then at that time, we decided, “Hey,
this is actually the passive income generated from the portfolio using the 4% rule. It’s actually enough for us to retire. So let’s do that instead.” So then, that’s when we started traveling
around the world. And then, basically, here we are. It’s been awesome! So, you totally do not regret not buying a
house. And I think we attribute that to our success
a lot because we didn’t have to pay for all those expenses that our poor friends have
to go through with property taxes and maintenance and all those headaches that a lot of people
don’t realize they have until they actually get into the headache of home ownership. That’s basically the drain in a nutshell. Mad Fientist: That’s fantastic! And that dilapidated house you mentioned,
that’s the one where the crazy guy was living there and he was digging six foot deep holes
all around the property. Is that right? Kristy: Yeah! Wow… Bryce: People have panic emailed us saying,
“What was the address?!” Kristy: Yeah! “Please tell us the neighborhood. I don’t want to have bought that house.” Bryce: I don’t want you to start digging
because I don’t want you to find a skull and freak out. It’s better that you not know. Kristy: Yeah, that house is just really creepy. You walk by and you’re like, “Why are
there holes all over the backyard? What is going on? I don’t want to look. I really don’t want to look. Let’s just walk by really fast and pretend
we didn’t see anything.” Bryce: The guy is 100% a serial killer. I’m calling him “serial killer.” Mad Fientist: Yeah, that’s crazy. So, somebody paid $800,000 to inherit all
of those problems which is absolutely crazy. Bryce: And that is happening all over the
city. And when we threw out those numbers, our friends
from New York say, “Oh, $800,000, that’s adorable.” So, even our kind of crazy housing market
is still happening all over the place. The same struggles can be heard from all these
people that are just so frustrated because they have this idea that you have to buy a
house because you’re an adult now. And if you don’t, you’re some kind of
weirdo or some kind of loser. That’s the reason why most people don’t
actually ever accumulate any money. They buy into that idea. And then they say, “Oh, I’m so smart. I’m saving money on rent.” But then they don’t realize that all the
other costs start adding up and you have to end up paying maintenance and you have to
end up paying property taxes. And then when you sell, you still have to
pay a 5% commission just to sell the damn thing. So, they wind up into these situations where
they pay off this mortgage for decades. And at the end, they come out and they’re
like, “Why don’t I have any money. I don’t get it. I thought I made the right decision.” Mad Fientist: Yeah, it’s absolutely crazy. I completely agree. We’ve done two houses in our lives. And luckily, we didn’t buy in high cost
of living areas like Toronto or New York or anything, so it wasn’t crazy to buy the
places. But yeah, the cost associated are just insane. The 5% or 6% in the States at least, where
we were, to sell it was just nuts! Kristy: Ouch! Mad Fientist: It’s a whole racket. Bryce: It is! It’s just a racket. Mad Fientist: Our first house in Scotland,
when we were selling that—I actually sold it myself because I was like, “This is crazy! Why am I paying someone over there?” It’s only 1.5%. I was like, “I’m not paying somebody 1.5%
to sell my house.” Bryce: What the…?! Mad Fientist: I’m like, “That’s insane!” So, I sold it. I created this whole website and everything
and I sold it myself. And then, I got to the States, and it was
like 5% or 6%. I’m like, “That’s nuts! Absolutely crazy.” Kristy: Wow! But good for you for being able to sell it
yourself. Mad Fientist: Yeah, thanks. It almost backfired because it was right before
the financial crisis. It was like 2007. Kristy: Oh, wow! Just in time. Mad Fientist: Yeah, no kidding. So, we only had three viewings. And luckily, the third one bought it, and
then the whole world collapsed. Kristy: Oh, my God! Mad Fientist: It almost completely backfired
just to save 1.5%. But it was worth it at the end. So, you guys have definitely challenged the
code of home ownership more than a lot of people because your video, as you just told
me beforehand, went viral. What did you say? 4.5 million views. Kristy: 4.5 million, yes. Mad Fientist: And your article talking about
all these stuff is the most shared and the most viewed CBC article. Is that right? Kristy: Yes, it is, yeah. Bryce: Yeah. Kristy: We cannot believe that we’re saying,
“Don’t buy a house.” It’s almost like you’re saying something
sacrilegious. It’s like, “What?! What do you mean? I can’t not buy a house. That’s what everyone does.” So yeah, we’re not surprised. Mad Fientist: And has there been a big backlash. Bryce: Yeah. Kristy: Yup! Bryce: Because when you say something like
this, every decision that people have made for the past five to ten years (where they
did this five to ten years ago), you’re kind of saying— Like the people that we sat down and we did
the math, and people around us said, “Oh, you’re not going to buy a house. You’re going to be sorry. Mine is going to go up to $1 million, $2 million. And you’re going to be sitting there with
nothing.” And then, now, not only did that not happen,
they are stuck with these houses that are sucking them dry. We are traveling the world and having a blast. People interpret it as an attack on themselves. People get really, really wrapped up in their
identity when they’re homeowners. So when you attack the house, even if you’re
doing it—the numbers, when you talk just the numbers of it, it feels almost like they’re
attacking themselves. So, yeah, the backlash has been a lot more
intense I think than a lot of the other financial independence bloggers have had. Kristy: Yeah, I believe that it’s more of
an emotional decision than a practical one. And I think we’ve been pretty fair when
we did the numbers. I like to say, “No, math, just shut up!” You’ve got to do the math. You can’t just base decisions based on emotions. But a lot of the times, even when we do the
math, people just justify it by just saying, “Yeah, well, the math doesn’t work.” But I’m doing it as a lifestyle decision. It doesn’t have to do with math. But then I’m like, “Well, yeah, you can
do that. But later on, when you run into financial
problems, then you know that you made the decision emotionally, not based on that. So you have to understand that risk.” So, the reason why we’re getting so much
backlash is because it’s an emotional decision and not based on math—it’s based on feelings. Bryce: Yeah, it’s a “lifestyle decision”
is just a code word for “I didn’t do the math, and I just buy it anyway.” Mad Fientist: Yeah, absolutely. There are so many arguments against it. I’m sure you’ve been given lots of them. Have you felt that you’ve convinced anyone
or is it just like politics, it doesn’t matter what your candidate does because you’re
voting for them anyway? Kristy: Actually, surprisingly, when we sat
down to do the math and we actually broke down an article of “Would we have been richer
if we have bought a house?” and we did all the math, people actually came to our site
(including real estate agents) and they actually looked at the numbers, and they said, “Yeah,
that’s actually pretty reasonable. That is how much it would cost for ownership.” And then, it actually made people go back
and rethink their math. A lot of the times, people just say, “This
is how much I bought the house for. This is how much I sold it for. And this is how much money I made” disregarding
completely all the ownership costs. It actually did encourage people to do the
math. So, we thought that that was a very positive
thing that came out of that whole calculation. And then, one of the things that we made people
question because they kept saying like “Leverage, leverage, leverage. You can use leverage to make money. This is all about leverage,” and then we
actually did the math for that, they were like, “This is very depressing. I’m going to go do the math, but this is
really eye-opening and depressing.” Bryce: Just to summarize the article a little
bit, what we did was we said, “Okay, between 2012-2015, we took an average house, and it
made $150,000. It went from $500,000 to $750,000. Yehey, everybody wins.” But then we actually started taking into account
all of the transaction cost and the property taxes and all the maintenance, the mortgage
insurance you have to pay and the mortgage interest itself and all these kind of stuff. We found that for the hypothetical person
who bought in 2012, sold in 2015 when the capital value of their house went up $150,000,
95% of the profits got taken away by those costs. They only got to keep a tiny, little fraction
of it. But they think that, “I’m a genius! I made $150,000.” That’s why housing is so dangerous. It makes you think that you are winning. Well, in reality, everybody else is winning—the
bank, the real estate agent, the contractor who you had to pay $10,000 to stage the place
or whatever […] So, it’s true that housing does make people
money—just not you. Mad Fientist: Yeah! That’s good. What is the name of that article, and I can
link to it in the show notes. That’s fantastic. Bryce: Sure! I think it’s Leverage: Is it Your Friend
or Your Enemy? I can send you the link. Have fun! Mad Fientist: Cool! Awesome. I’ll put that in the show notes. It sounds like a great article. Bryce: And then, as Kristy was saying, people
came on and tried to attack it. And then, some of the real estate agent, they
looked at all the line items and said, “Okay, that’s true, that’s true. That is true… uh-oh…” At this stage, it was like, they said, “I
have to go home and rethink my life a little bit.” Mad Fientist: That’s amazing! Kristy: Because one of the questions we asked
for that article was like, “If it’s such a lucrative investment, the bank has lots
of money. Why don’t they buy the house? They have enough money to buy the houses. Why did they want to lend you money, so you
can buy the house? And if the house goes up or goes down, then
they get their money regardless. You have to take your hair cut. It’s so lucrative. Why doesn’t the bank buy it? Hmmm…?” And it’s like, “Yeah, that’s true. Why doesn’t the bank buy it?” Bryce: “Houses always go up.” “Why don’t you buy it?” “Well, I don’t want to.” “Well then, you’re lying to me.” Kristy: It’s a scam, it really is. Bryce: It’s a scam. It’s a total scam. Mad Fientist: Yeah, definitely. And once you buy into that, it’s like, well,
you’re always going to have your money locked up in the house because you’re not going
to just make your fortune, and then start renting because. Even if you actually do make a fortune, and
you’re like, “Well, buying is the best thing,” and then you’re just going to
sink it into a bigger house, a more expensive house, then your money, if you do make any,
is just going to be locked up in that asset for your entire life, and you’re never going
to benefit from it really. Bryce: Yeah, that’s the fascinating thing,
isn’t it? More than any other of your asset, it is tied
to your sense of identity. And once it is tied to your sense of identity,
you can’t get rid of it because then you’re getting rid of part of your identity. I mean, if you’re an index investor like
us, we don’t go, “Oh, VT stocks is my identity. I can never part with it.” Kristy: “Don’t ever attack my VT stocks.” Bryce: That doesn’t make any sense, but
it makes people go crazy. As you know, if you’re making investing
decisions based off of like—if you’re buying something and you say, “I can never
sell this in the future,” you’re not investing. You’re just throwing money at something
to make yourself feel better. Mad Fientist: You’re right. Yeah, yeah, absolutely. I completely agree. And then, the whole argument of renting and
you’re throwing money away, it’s just insane to me. You’re getting shelter for that money. That’s a valuable trade of dollars for something. You’re not throwing money away. You’re buying something very important. And it’s just costing you less than what
you’re earning. I’m so happy to be renting again. We’ve been renting for the last year. And we’re renting furnished places now,
which is even better. It’s like we have nothing that we own. Have you guys been loving it? Kristy: Yeah, we love it as well. That’s why we wrote the article on—we
did a guest post on JL Collin’s blog which is Buy Your Freedom & Rent the Rest because
it really is awesome to be renting. When we lived in Toronto, we also rented cars
from Auto Share instead of actually owning a car because any time anything breaks, you
don’t have to worry about it. And then, this one time, this crazy white
van—I hate white vans. They’re like my arch nemesis, seriously. The worst! This white van came in. It swerved. It went on the other side of the street and
then hit us. Everybody, all the witnesses said, “Okay,
that van was driving dangerously. It’s completely their fault.” They told the police and everything. And then the insurance company still ruled
it 50/50. But luckily, because it was a rental, we didn’t
have to pay anything. It was just covered as part of the insuring
policy, as part of the Auto Share agreement. It was just like, “Okay!” So, we just got another car the next day. We didn’t put out any money at all. So, renting everything really does take away
the stress. Like you said, you’re renting a place with
furniture right now. It’s like, “If anything breaks, it’s
the landlord’s problem, not your problem at all.” Bryce: I mean so many readers write in to
us and just kind of saying, “I’m trying to get ahead, but it just seems like, every
month, there’s an emergency—a pipe burst, my car tire blows,”—something about a
muffler. I don’t even know what a muffler is. Something goes wrong, and it just ends up
costing you a lot of money. And then you have to think… if every month,
there is a once in a blue moon emergency, that’s not normal. Kristy: Yeah. What do you save for retirement if you’re
constantly having costs that you can’t predict? It’s just popping out of nowhere. Mad Fientist: Yeah, I completely agree. Renting has just been amazing. You can rent exactly what you need at that
moment and you’re not buying this house that has three bedrooms because you think
you may have kids in 10 years and a big mini-van because you may have those kids and all these
crazy things that are costing more money just because, one day, you may need them. You just rent exactly what you need at the
time. And yeah, it’s fantastic! It’s easier than ever now with all of these
start-ups coming up that lets you rent other people’s houses, rent other people’s cars,
rent everything. It’s just amazing. Bryce: Life is far simpler than what most
people think it is, isn’t it? Mad Fientist: Oh, yeah. Absolutely. Bryce: People think life is so difficult because
they’re constantly working hard riding this treadmill, paddling, and they don’t realize
that they added all of these baggage onto themselves without realizing it. They’re completely optional. They’re completely a self-inflicted wounds. Then when they’re done, we take all those
things up and you realize how far you can go, life becomes so much easier. It’s just eye-opening. You just want to tell people. You don’t have to do all that stuff that
you think you have to do. And that’s what makes people so stressed
out, freaking out over where the next paycheck is going to come from—but it’s all self-inflicted. Mad Fientist: And the Buy Your Freedom & Rent
the Rest article that you mentioned, that’s how we actually got talking. I left my first blog comment in probably like
four years when you posted that on your website. I felt so strongly about it. So, I’ll definitely link to that article
as well because it’s great. And the example I gave in that comment is
that when we were in Mexico, we wanted the pool for the week, and so we just rented an
AirBnB or a VRBO with a pool. And then, my buddy came down to visit us,
so we needed an extra bedroom. So then we just moved to another place that
are 2-bedrooms. Kristy: Yeah, that’s awesome. Mad Fientist: And then, we moved back to the
pool place. And it’s like you can’t do that if you
bought something. Renting allows you to get exactly what you
want when you need it. That’s just awesome. And I don’t think I’ll ever go back. It’s just been fantastic! But back to you, guys, let’s dive into what
you do invest in then. So if you don’t invest in real estate, where
is all your money part? Kristy: So, we structured our investments
into a 60/40 portfolio—60 equities, 40 bonds. So what we’ve done is because we’re now
in retirement, we need to actually rely on the income for our expenses. From that portfolio, we generate 3.5% approximately
of dividend income. So, a lot of people have been asking, “Oh,
no! Trump has been elected. What happens if your portfolio gets decimated? Have you thought about that?” It’s like, “Yes, we have.” And so one of the things we can do is live
off that dividend income without having to ever sell anything, and then use rebalancing
to come out of it. And so, using the 60/40 portfolio, and using
the strategy of indexing, using the cost ETFs, and then rebalancing periodically has actually
helped us survived 2008. We were actually investing back in 2008 before
we decided to buy the house. And this current strategy is actually the
strategy that allowed us to survive without losing any money at all. It’s a tried-and-tested method, and we’re
definitely going to stick to it. That’s why the Trump presidency hasn’t
really scared us at all. We survived worse, so it’s going to be fine. Mad Fientist: That’s awesome. And it wasn’t all smooth sailing there. You did sell all your stocks in 2009, is that
right? Can you tell that story? Kristy: Yeah, that was a really stupid mistake. Bryce: Well, yeah. But it wasn’t actually because we’re just
kind of, “Okay, now, we’re scared.” When we sold that we had gone back to break
even, we were like, “Oh, geez! Thank God for index investing. So now we know that it works.” Kristy: But now, we’re like, “Let’s
go badass!” Bryce: At the time, we had decided to get
married. We were independent. We were just investing for the sake of investing
back then. We weren’t investing for financial independence
back then because we haven’t even heard of it. Well, at that time, 2009 or 2010, we were
getting married. And then, we figured we didn’t even need
all these money that we have. Kristy: Probably in the future, we would need
to have more money in cash… Bryce: …in order to go and buy that house. Kristy: Yeah, settle down and all that stuff. Bryce: Then we realized what we actually wanted
to do. We ended right back into the same portfolio
we had before […] Mad Fientist: Nice! So, how long did you end up being out for? Bryce: I think 2010 to 2012. That’s how long it took for us to discover
M&M and you and these other guys that had done all these amazing things. We’re like, “Wow! Can we do it too?” And apparently, the answer was yes. Mad Fientist: Nice! So, it obviously wasn’t too bad because
now you guys are just hanging out in Chiang Mai and enjoying life. But yeah, it was a funny story when I read
it. If that’s your biggest mistake, as you’ve
said, in that article, then that’s not so bad. Bryce: Yeah, not too bad. Kristy: Yeah, champagne problems. Bryce: Champagne problems. Mad Fientist: Right, exactly. And at least, like you said, you didn’t
do it for fear or something. It was a calculated move. Bryce: Yeah, yeah. Mad Fientist: So, that’s been going well. And you guys actually have a financial advisor,
which is quite rare in the FI space I would say as far as bloggers doing it all themselves. But you’ve had good experiences, is that
right? Bryce: Yeah, that has been a very positive
experience. Our financial advisor is actually another
blogger, Garth Turner who wrote the blog Greater Fool, who taught us about a lot of the other
stuff as well as how dangerous housing is. He was one of the big anti-housing kinds of
bears in Canada. And then, we got to talking with him. And together, we kind of figured out the mechanics
and the actual nitty-gritty details of how to build this portfolio and how to actually
structure it. A lot of the finance bloggers out there, you
just kind of go 100% equity, and then just go, “Yee-haw!” So, we wanted it to be a little bit more conservative. We needed some help doing that. It’s been a pretty big experience. And yeah, we highly recommend it. Mad Fientist: That’s cool! I can link to him as well. You said Greater Fool. Bryce: Yeah, Mad Fientist: Cool! So, obviously, you interact with a lot of
US bloggers and people I’m sure. Are there any major differences between reaching
FI in Canada as opposed to the US? Bryce: I think that the biggest difference
is healthcare which is far more complicated in the US than it is in Canada. In Canada, it’s just kind of like, “Yeah,
you’re done. If you ever get sick, you fly back to Canada,
and you’re just good to go.” And in the US, until recently, people would
be scared. They didn’t want to leave their work because
they were scared of losing their insurance. And then, ObamaCare came around, and then
that was the way that we were trying to tell people, “It’s going to be okay. It’s going to be okay.” And then, Trump happens. We’re still not sure what’s going to happen
with that. Just base on my conversations with the rest
of the FI community, everyone is still trying to figure out what to make of that, especially
on the ObamaCare stuff. So, that has the potential of blowing up a
lot of math. And that is something to be concerned about. Once an answer kind of clears up, we’re
all going to write about it and figure out what the right thing to do is. But right now, we actually don’t know yet,
which is unusual. In Canada, it’s just easy. But in the US, it’s far more complicated. Mad Fientist: Yeah, I’m back in the UK now
as a full-time resident—well, once we get back from this trip. I’m just so amazed having the NHS there
to back you up. It’s just such a different feel to everything. You go to the doctor, it just feels like they
want to help you and make you better. It doesn’t matter if have to get sent to
a specialist or two specialists or whatever. They just want to make you feel better and
help you get well. You go to the pharmacy, and they just give
you free drugs. It’s just amazing! I absolutely love it. Do you feel the same about your socialized
medicine in Canada? Bryce: Yeah, absolutely, absolutely. And the strange thing that I kind of noticed
is that a lot of the financially independent people have a dual citizenship or they grew
up in another country. So, I know that Mr. Money Mustache is Canadian
I believe. You have ties to the UK. We’re Canadian. Jeremy and Winnie from Go Curry Cracker, she’s
Taiwanese. So they’re right now in China […] So, I think part of that is the optimism from
the people who become early retirees comes from the fact that they have this idea that
they’re not scared of healthcare issues coming up and blowing up their life—part
of it. But people who actually were born, raised
and grew up in America, that’s always part of their calculations. And that scares them for a good reason, right? So, I think that’s an odd thing that I’ve
noticed about a lot of us. Kristy: Well, on one plus side, from traveling,
we’ve noticed that there are other countries that actually have very, very low cost and
very high quality healthcare compared to the States. I think Thailand has one of the highly rated
places for medical tourism. A lot of people come here and get treatment. It’s very fast, very high quality. A lot of the doctors and dentists have actually
been trained in Boston and other places in the States. Seeing the doctors is $12 or something. It’s ridiculously cheap! That’s another option that early retirees
have found, that they can move abroad and get very cheap healthcare that way. That’s something we discovered as well outlining
with the idea that most of America is very over-priced and there are many other options
abroad that you can tap into. Bryce: Yeah. There were some early retirees that we met
who found it actually cheaper to exit the US and then get their healthcare through travel
insurance which is counterintuitive when we think about it, right? It’s like, “Really?! Okay.” But it’s because the healthcare system in
the US is so complicated. Kristy: Complicated, yeah. Mad Fientist: Do you guys have some travel
insurance for when you’re outside or are you just self-insuring? Bryce: We have travel insurance, yup. It’s not that expensive. It’s like $1500 for the year for the two
of us and it covers the entire worldwide—any kind of travel, you’re covered worldwide. I don’t know what the cost is if you were
to self-insure in the States, but I suspect it’s higher than that. Mad Fientist: Yeah, definitely. We’re currently on a 3-month trip. We get 3-month insurance for the two of us
for something like £230 or something like that. And it covers the US, so we’re completely
covered now in the States. We’re paying a fraction of what most people
pay per month just to have insurance in their home country which is crazy. Bryce: Yeah, crazy. Mad Fientist: Yeah, I completely, completely
agree if you’re willing to travel. And that’s the beautiful thing about early
retirement. People are young and able and willing to do
things like that. That’s a great way to handle that equation
at least for the early year. Just go and travel other places and get cheap
travel insurance rather than crazy American style insurance which is… Bryce: Yeah. Again, it’s the thing that we’ve discovered. Life is so much simpler and cheaper outside
of North America. We’re in one of the most expensive countries
to live in. It’s a great country to make your money
in work, but it’s far easier to retire outside of it because the costs are so inflated. Mad Fientist: Absolutely! You mentioned that you write children’s
books. Can you talk a little bit more about that? And also, what’s been keeping you occupied
ever since leaving your jobs? Kristy: Yeah, sure. The writing the children’s book, the funny
thing is I had this crazy idea back in 2008 because I was reading Twilight. I was like, “Oh, my God! She made how much money from writing this
book?” And when I read it, I was like—I mean, it’s
fine, but it’s not JK Rowling level. So I’m like, “Hmmm… I could probably do this too.” So, I was like, “I’m going to accomplish
my dreams of being a writer outside my day job of being an engineer. I’m totally going to do this. This is going to be really easy.” And it was totally the opposite of what I
thought. I have so much respect for others now because
it was just five years of just being stuck in the writing trenches—just rejection after
rejection after rejection after rejection. And it actually made me very grateful that
I decided to chose the engineering STEM path and they kind of follow my dreams on the side
rather than rely on that for my income because there’s just so many writers out there and
so few writing jobs. It’s so hard to make it in the publishing
industry. I was really, really glad for that experience
because it really humbled me and it taught me a lot about writing. But man, am I glad I decided to go the STEM
route in terms of the salary and then just do that on the side. But happily, we did get through it. We did get through all the rejections. We wrote all three novels together. And two of them got completely thrown out. And it was the third one that got published
by Scholastic which actually happens to be the biggest children’s publisher in the
world. And it took us… Mad Fientist: Oh, congratulations. Kristy: Yeah, thank you very much. It took us about five years to get here. But that’s one of my passions. And now that we’ve been able to retire and
become FI, I can actually do that full-time now without having to worry over where’s
the money going to come from and “Can I actually pursue this because, financially,
it doesn’t make sense.” But now, we can just do that and actually
really enjoy it. Mad Fientist: That’s fantastic! So you’re writing another one then? Kristy: Yeah! So… Bryce: Yeah, we’re writing the series […] And
people has been really, really receptive to that. The whole dream of becoming a writer professionally,
it ended actually becoming true, strangely enough, after we left our jobs. We’re now writing pretty much every day,
writing articles for the blog, writing on the fiction route and the non-fiction route. So, it’s been pretty crazy. When we came out with our story, it kind of
blew up in Canada and it also kind of went into the States pretty strongly as well. We were in Business Insider and Yahoo Finance
[…] People really, really want to hear about this whole financial independence thing because
I think it really addresses a big problem that people didn’t know that they had. Mad Fientist: Mm-hmmm… no, that’s fantastic. That’s so good. And we actually didn’t talk about this. But what did you both do before you retired? Kristy: We’re both computer engineers, and
we actually went to the same university. We were like lab partners. It was a very nerdy love. Bryce: Software development. You’re in software development too, right? Mad Fientist: Yeah, yeah. Yup. Bryce: Yeah, yeah, yeah. Mad Fientist: Lots of us in this… Bryce: That’s one of the strangest things. It seems to be happening a lot. There are a lot of people that are engineers
that ended up doing this other type of thing. Kristy: Mostly engineers, yeah. Bryce: It’s very fascinating. I’m not sure why. Kristy: MMM is an engineer. His wife is an engineer. Mad Fientist: Yup! Yeah, yeah, yeah. Jeremy. Kristy: Jeremy. Jeremy is an engineer. I think Justin, also an engineer. Bryce: Yeah! Kristy: Yeah, it’s just really funny that
that just happens to be the pattern. Mad Fientist: Yeah, I think MMM did a post
on his site a while ago, many years ago. He polled his readers. I think it was like some crazy percentage
where over 60% were some sort of… Bryce: I think it’s because we get turned
on by spreadsheets. Kristy: Yeah, we all like optimizing the crap
out of that. Mad Fientist: Oh, yeah. It’s definitely optimization. Yeah, absolutely. Bryce: And it’s a natural part of our thought
process. You put a dollar in instead of milli-amps
and then it’s the same process. Mad Fientist: Right, exactly. So you guys are still coding, right, but you’re
doing it for a non-profit. Is that right? Kristy: Yeah! So, that’s one of the rewarding things we’ve
been doing as well. We’ve been able to give back to the community. We met a group of writers through our writing. They started a non-profit to promote more
diversity in children’s literature. So I’m actually working with them to develop
an app to help people find more diverse books. So that’s one of the passion projects that
we’ve been working on. And then, as a result of that, because we
have those writing skill and the coding skill and it’s very portable, we can actually
do that anywhere in the world. We just need our laptop and an Internet connection. So that actually fits really well with our
lifestyle currently. Bryce: Yeah. Mad Fientist: Any other big projects that
you’re working on at the moment? It sounds like that would keep you plenty
busy, all of that stuff, especially with the traveling and everything. Bryce: Well, the biggest part is the blog. Right now, we’re kind of experimenting with
what we want to do with the thing. Right now, we’re running this thing called
the Investment Workshop. There are so many people that have talked
to us and said, “I like the idea of index investing. I don’t know where to start. I’m scared. I don’t even know where to sign up” and
this kind of stuff. So, we started doing this as an experiment. It just kind of says, “Okay, here’s what
we’re going to do. We’re going to pretend that we are building
our portfolio with real money. We’re going to use the real stock market. We’re going to show every single move that
we do. We’re going to show screenshots you can
follow along and you can learn.” “You can follow along and mirror our steps
if you want to. We’re going to tell you every decision that
we make along the way, why we’re doing it, and how we’re actually implementing it. And you can see the results.” People have been really receptive to that. I don’t think anyone has done it before. It’s all for free because we want anybody
to be able to participate and learn how all these stuff works. You know what? If you walk into a bank, and you say, “How
do I invest?” they just shove you into the worst high fee-paying
mutual fund at all. There’s a lot of people out there that want
to learn this stuff, but they don’t know who to trust because the entire finance industry
is geared to helping you make the wrong decision or you and the best decision for them. That was something that really frustrated
us. We’re trying to do something about that
right now. We’ll see how that goes. Mad Fientist: Yeah, that’s fantastic. I’ll put a link to the investing workshop
in the show notes. It’s really good. I went through all the articles you have so
far. It looks fantastic. That’s such a good idea. Bryce: Oh, thank you. Mad Fientist: It’s no surprise that people
are into it. Bryce: That means a lot coming from you, man. Mad Fientist: Oh, thanks. Yeah, it’s great. I’ll link to that in the show notes. So, yeah, I don’t want to keep you guys
too long. I know it’s 9 p.m. in Thailand right now? Kristy: Yeah, it’s around that time. Mad Fientist: So, there’s time for at least
one more Pad Thai? Kristy: Yeah, Pad Thai, maybe a foot massage. Bryce: Yeah, yeah. Absolutely! Kristy: Oh, my God! The massages are ridiculously good. It’s like $10. It’s just ridiculous. I’m like, “Wow!” Mad Fientist: Oh, that’s so good. Up in the northeast corner of the old town
is where we found the cheapest ones. I think it was 200 baht for an hour or something
(or half an hour, I can’t remember). It was super cheap and fantastic! So, yeah, I don’t want to keep you too long. But I usually end all of my interviews with
asking, “If you had one piece of advice for someone who wants to pursue financial
independence, what would it be?” Kristy: I would say, “Question the status
quo.” Don’t just do what everybody else is doing. That’s what we were doing. We were just heading in that direction. Everybody is buying a house. I know it’s expensive in Toronto. “I have to buy a house because that’s
what everybody does. There’s no other way to live your life.” And when we started questioning it, then we
started thinking, “Maybe we don’t have to do this. Why do we have to do what everyone else is
doing? And maybe we’ll regret it, but let’s try. Let’s try something different.” And that’s actually completely made a huge
difference. That completely changed our lives. Now, I actually get to do work for non-profits. I get to do passion projects. I get to interact with people on the blog. It really is life-changing to question the
status quo. Like Steve Jobs said, “Everything that you
know around you is made up by people that are not smarter than you are.” He’s absolutely right about that. You have to question. Mad Fientist: That’s fantastic! And Bryce, would you give something else or
would you agree with that? Bryce: Yeah, I would say just to add to that…
find people who are living the life that you want and ask them. The financial independence community has been
growing as a movement by leaps and bounds. And the great thing about this community— Even if you don’t believe our blog, go to
yours, go to Money Mustache’s, go to Jim Collins’. We’re all trying to help people do it themselves. We’re all trying to shake up the system
in some way […] what it means to be working and what it means to be like a middle-class
kind of guy. And we’re feeling that the movement is starting
to become more and more—it’s not mainstream yet, but it is gaining momentum. When we were first starting out, when this
whole thing first started out, it was Money Mustache and Jim Collins. They were seen wildly as freaks and weirdos
doing this strange kind of stuff. And then, you came along and Go Curry Cracker
came along. And then, Justin from Root of Good came along. And then, we’re coming along. It’s starting to feel like it’s becoming
harder and harder to dismiss us as a real thing. It’s harder to attack us saying, “These
aren’t real.” So, I would say read these blogs and learn
from these guys. Everybody wants to help people. Everybody wants to teach the stuff that they
learn. We’re not trying to keep and hoard this
knowledge for ourselves. We want it to get out there as much as possible. So take advantage of that, right? Mad Fientist: Nice! I completely agree. I highly recommend people check out your site. So, how can people find you? Kristy: So, go to We post there three times a week. Mad Fientist: That’s insane. How do you do that? I can barely post once a month. And it’s like stressing me out. How is that possible? You guys are natural at this. Kristy: Well, having two of us does help. Bryce: There are two of us. And we are fiction writers. Kristy: We used to writing more. Bryce: We’re used to writing more, like
every single day. Mad Fientist: Oh, that’s good. I need to get into a better habit. I can’t even imagine. How about emails? Can people email you from there or just leave
comments on your post? Is that the best way to get in touch if they
want to just say hello? Bryce: Yeah, absolutely. Our email is in our contact us form—and
as well, just in our comments. We try to answer every single one. Mad Fientist: Awesome! Well, thank you both so much. This has been great. I really enjoyed talking to you. And hopefully, I’ll see you somewhere in
the world, maybe Southeast Asia in December which would be really cool. Have a great time! Thanks again. I really appreciate it. Bryce: You too! Kristy: Alright! Mad Fientist: Alright, bye. Kristy: Take care.

21 thoughts on “Millennial Revolution – Denouncing the Cult of Homeownership

  • I probably jumped into a townhouse too young because I felt like rent was a waste. I was on the Dave Ramsey high and wanted to be proud and pay off a mortgage. With taxes, insurance HOA etc and the selling fees they spoke about in this video I'm totally seeing a different perspective although I'm really on the cheapest side of the home ownership spectrum. However I am more like MMM when it comes to lifestyle and DIY. I love to maintain and fix and be capable, self sufficient and knowledgeable enough to work on my cars/houses/etc and help my friends and family with theirs. To me, being physically creative and existing in an environment that I can somewhat control appeals to some sort of primal instinct in me. I think this is why people see buying a home as a milestone and a piece of their identity. I know happiness from materialism is fleeting but owning a house or property can be so much more than a mindless choice we all justify. My wife and I joke about renting again but it's simply not realistic for the space we want for ourselves and area we want to live in. It comes at a price but it does not correlate to financial ruin either.

  • When we bought our first house we cut our monthly costs in half. We were in a high COL area and our rent was such a ripoff (and kept going up every lease renewal)! When you all do the math, do you subtract out what you would have spent each month as renters and also the tax benefits associated with owning? That first house changed our lives. Had we not bought it, we wouldn't be close to FI. Maybe we've just been super lucky, but owning our houses hasn't come with a lot of associated costs beyond property taxes (which are pretty low in FL). We'd be paying most other bills in an apartment anyways, and rent here is high. This may be because all of the houses we've owned have been new or nearly new, save for one. I think we sold one right at the potential headache point (10 years-old).

  • So in 2012 they decided to save money and invest, and now they have a million dollars. I wish I had thought of doing that! It's all so simple! Why doesn't everyone build up a million dollars in 4 years? What's wrong with people?

  • So what is the advice to people who are not engineers and don't have hundreds of thousands of dollars to invest? I always hated the Dave Ramsey analogy of two teenage guys, one invests 2,000 dollars every year to his portfolio and the other doesn't. The point is over the years, the one who invested the most early on has a lot more money etc. But what teenage kid has that much to invest each year?

    How does this advice help the average person? How much money is needed to start on this path? What annual income or disposable income is needed to start and more importantly be successful.

  • Wait a moment. They had 500k invested, had a chance to jump into the Toronto housing market a few years back, and they're saying that THEY came out ahead from a mathematical standpoint?!

    Look, I understand if you want to travel the world. But if your sole goal is increasing your financial worth, then they missed a great opportunity. That market is earning its investors more than any stock market over the same period.

    It honestly sounds like they're just trying to make themselves feel better by sh*tting on other people's keen market decisions. That's cool if you don't want to buy a home, or stay more active in the stock market, but don't hide behind "math" as your reasoning. You missed an opportunity, mathematically speaking.

  • Any so called 'math' comparing renting vs owning must inevitably be based on assumptions on future trends and values for inflation, interest rates, portfolio returns etc. It is not an exact science, that's why there is no conclusive study supporting one over the other. For example, we don't know how much rental rates are going to increase in the future…

  • sold home did bucket list with asset got at time. now rent by beach and shops but practice non consumerism nice to browse. minimalism great. if emergency easily transportable ie flood etc. pay bills get discounts. travel 6 countries a year pay bills help child get education with cashflow have pension plan growing quicker than bank. if. one lost job can survive on 1salary gives peace of mind. will hopefully die poor having lived well and done bucket list and can afford life insurance to pass on also got child on road to own success with education now on professional salary living in city having a great life and travel as earning well. win. win. for. everyone. be. poorest parson in graveyard but most amazing life had been to dozens countries and money to help others and pay medical bills. renting great if employed

  • the apartment in double glazed won design awards low maintenance materials and 360 degrees harbour 1 bed but room to host on pull down settee so roomy so living life of millionaire on cheap rent. also as smaller and no garden less waste bills but could grow veg on roof. all appliances and repairs free if needed to move on would have minimal furniture to store or would sell and start again with second hand stuff now work less and can focus on creative things or hobbies that could bring in cashflow in emergency would buy a motor home and freedom camp till decided on next move. lifestyle all the way against mortgage and work and beck and call of employer. also casual work great work where and when want

  • release asset and spend on bucket list don't wait to get bad news to live how you should. renting a nice place gives you less stress more freedom and therefore less ill health medical bills and love how Canada does furnished apartments daughter lived there for 18months getting career developed then when moved to Aussie for better job no hassle

  • They're critical of home ownership, but with house appreciation after about 10 years, home owners are several hundred thousand dollars richer. Not sure you can have several hundred thousands of growth in mutual funds, or indexes, or stocks.

  • As a landlord I love these millennials and their attitude towards home ownership, and so will my children and their children’s children. Keep living it up and btw spread the word to all your friends!

  • Bank have lot of money why they don't buy real estate.
    If its so lucrative investment then let bank buy it and gain the profit.
    Home investment is a sacm.
    Amazing thought…!
    Thanks mad fientist…!

  • It's an interesting decision and one I've thought about. At some point they have to come back to Canada if they want to keep that healthcare they value. Rent will be more expensive then. Also, no friends or family to hang out with. Maybe that's not important to them since they have each other. I'm sure Thailand and these other places are great to visit for a couple months, particular during the Canadian winter, but I truly wonder if they are in it for the long haul. At least they have each other and some work they do to pass all the time on their hands.

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