010: Moving From Florida to Alberta | Court from Modern FImily

In this episode, Ryan and Chrissy interview Court from Calgary, Alberta. We talk about why she and her wife moved from sunny Florida to snowy Alberta, the benefits of living in Canada, how coming out as lesbians was easier than coming out as FIRE… and so much more!

Court’s story

  • Court’s dad is a dual-citizen who was born in Ottawa and raised near New York City.
  • Court was born and raised in Florida and now a dual US/Canadian citizen.
  • Her wife Nicole is from Saskatchewan, and they met in Florida through playing hockey.
  • They weren’t fans of the heat and humidity (or the people) in Florida.
  • They came up to Canada to visit Nicole’s family and friends and fell in love with the Canadian Rockies (especially Canmore).
  • Almost all of Nicole’s family lives in the Calgary area, so that’s where they decided to settle (in 2015).

The move and the plan

  • The plan was to move to Alberta then travel for a year. They travelled for six months, but Court ended up with a job offer.
  • At the time, the job market was shaky, so Court decided it was a wise decision to take the job and cut their travels short.

The transition from Florida to Calgary

  • It took two years to decide on and plan the move to Calgary.
  • In that time, Court and Nic sold everything which helped to propel them towards FI by allowing them to develop a valuist mindest.
  • Court didn’t know what to expect other than more affordable healthcare.
  • An unexpected benefit is the people—they’re more laid back and less focused on status and keeping up with the Joneses.
  • Their quality of life is much better now. They get outside and enjoy the nature around them and are so much happier.
  • All these lifestyle changes are what propelled Court and Nic towards making the move from Florida.

Comparing the cost of living and earning potential

  • Court works in the renewable energy space, and hasn’t found a discrepancy in pay.
  • She actually finds there are more companies in renewable energy in Calgary. That gives her more opportunities to jump around to increase her pay.
  • Pensions are more common where she is now than in the States.
  • Benefits are more generous as are government-provided benefits like maternity leave.
  • She talks about some of the huge differences in the healthcare system between the US and Canada. (Yay Team Canada!)
  • She hopes Canadians appreciate not having to worry about the cost of their healthcare and whether they can afford the procedures and care that they need.
  • Ryan and Court further discuss the extreme differences in the two countries when comparing hospital birthing experiences and maternity leave. (Again, Canada wins!)

Their FIRE plan

  • They’re basing their numbers off the 4% safe withdrawal rate, living on $35,000 per year (which means $875,000 is their target number).
  • To get below a 3% withdrawal rate, they’re factoring in a larger Child Tax Benefit (because they’ll be lower-income once Court retires) and currency arbitrage (the majority of their investments are still held in USD).
  • They currently calculate their portfolio as if their US dollars are on par with CAD. If they were to take the 1.3 exchange rate into account, they would already be FIRE.
  • These tactics will help them to mitigate the sequence of returns risk.
  • Chrissy says this further reinforces what they discussed in the 4% Assumption episode: people in the FI community are very creative and have many ways to lower their withdrawal rate to under 4%.
  • Court says you also need to plan for what your lifestyle will be, not what it’s like right now. There could be factors in the future that could positively affect your FIRE plan.
  • She feels there’s really no downside to FIRE. It just gives you options and the ability to choose what you want to do with your life (even if it includes going back to work).

Coming out of the closet twice

  • Coming out of the closet as lesbians was gut-wrenching and scary, but not at all an issue with their families.
  • She started an Instagram account about six months ago (fire2moms1babe) and it felt like coming out of the closet again!
  • Money is still so taboo, and no one really wants to talk about it.
  • It’s interesting how it’s so much harder for them to come out as FIRE seekers than it was to come out as lesbians.
  • No one in their family knows about their FIRE aspirations, and she can’t figure out how to broach that subject.
  • While Chrissy is fully ‘out’ about her FIRE plans with her family, Ryan is also still in the closet.
  • He and Court fear similar things: that people won’t get how much work it takes to reach FIRE; they’ll judge; they’ll expect handouts.

Her wife Nic’s role in their plans

  • Nic has always been a frugal, non-spendy person and is totally on board with FIRE.
  • They decided together that Nic would be a stay-at-home mom to their daughter.
  • Nic didn’t love her job as a nurse whereas Court enjoys her job enough to continue working.
  • Their priority is happiness, so it made sense for Nic to leave her job to become a stay-at-home mom.
  • This choice only delays their progress to FI by about a year or two.

The benefits of a full-time stay-at-home parent

  • Court and Chrissy discuss the benefits of having one parent at home full-time.
  • It’s an easier, happier life. The schedule is less hectic. There’s just more time for everything.
  • Court is even considering shifting to part-time work. This would add a year to their FIRE plan, but it would allow them to enjoy the journey more.
  • She would be there more often to see their daughter Finn, 16 months old, grow up.
  • Their hope is to both be around when their kids are little and cute, then consider part-time work once they’re in school.
  • Ryan tells us his whole reason for FIRE is to be a stay-at-home dad. He wants to be there to see the early milestones and not have to work 60 hours a week to support a lifestyle they don’t care about.

Signature questions

  • Team FI or Team FIRE?
    • Team FIRE—it’s just way more catchy. Court also likes FIOR (financial independence, optional retirement).
  • Tim Hortons order?
    • Court loves matcha tea lattes and doesn’t do coffee, so she’d order a farmer’s sausage wrap.

Episode links


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12 Replies to “010: Moving From Florida to Alberta | Court from Modern FImily”

  1. I would have liked to hear more regarding why Court decided to discount all of her US $ investments by counting them on par with the Canadian dollar. This seemed to get passed over quickly in the interview.

    She expressed that this was a conservative measure she took to feel more comfortable with their FI number. I would have liked to hear her discuss why she preferred this approach over using a more conservative SWR. That could have led in an interesting direction given the previous conversations on this podcast around the 4% assumption.

    1. Hi NotAName,

      Thanks for your comment—we love feedback like this! You’re right that we glossed over Court’s withdrawal strategy. There was just too much to talk about and we couldn’t fit it all in!

      As we’ve mentioned, we will have Court on again. But until we do, you can read more about her FIRE plans (including a lot more detail about her withdrawal strategy) on her blog: https://modernfimily.com/what-is-our-fire-number-and-why/

      Chrissy

    2. Hey NotAName,

      Court here. As Chrissy mentioned, I did cover our SWR in the blog post she linked to below. By using this conservative approach of viewing our US portfolio discounted vs using the current exchange rate, this move essentially brings us from a 4% SWR to a 3% SWR since a majority of our investments are in USD. And if we combo that with the Canadian Child Tax Benefit then we wi be sitting closer to a 2% SWR in actuality. So we are VERY fiscally conservative. I think a 3.0-3.5% SWR is pretty conservative and we are being way more conservative than this – mostly sure to my fear of the current market conditions.

      Thanks for tuning in and hopefully I’ll be on again in the near future where we can dig further into our numbers.

      Court

  2. So great to hear Court as I discovered ‘Modern Fimily’ recently through ‘Tread Lightly Retire Early’. Interesting to hearing about the differences between the US and Canada. I find the thought of having to rely on health insurance so scary. In the UK many people complain about the National Health Service, but in reality we are so lucky and health insurance doesn’t have to factor in our financial calculations.

    1. Hi Sam,

      Thanks for the comment! I knew I wanted to interview Court the moment I came across her story. There’s just so much in it that’s unique, interesting, and compelling!

      Like our British friends, we often gripe about the Canadian healthcare system. But I agree, we’re pretty darned lucky to not have to worry about coverage and insurance.

  3. Holding all of the investments in US Dollars could be classified as a mistake. Just as a Canadian should hedge their lifestyle by holding US dollar assets and hold a US Dollar savings account if they like to travel to the US often, or like that Canadian Snowbird idea. Hold considerable assets in the dollars you spend.

    But more importantly a home bias is not good in the investment world. A investment home bias (when that’s not your home) is dangerous. Canada and US assets at least, most would recommend some International assets as well.

    Even a US investor did much better historically with a Balanced Portfolio that included International Stocks, compared to an all US portfolio. I’ve penned on that. In fact the outright returns were better and with less risk.

    Bonds need to be in the mix as well, of course.

    As per the desired retirement spend rate. Our 2 kids likely required about $25,000? after tax dollars annually in the most expensive years. And at that point, we have not yet paid for mortgage, had anything to eat, bought any coffees, gone on any trips, etc. etc.

    But I understand that this is not FIRE we’re talking here, but FI. They’re still factoring some form of work into the equation. It looks like meaningful employment income will still be required.

    That seems to be the consistent theme in the FI community.

    The folks I know who have actually retired early have pensions 🙂

    Dale

    1. Hi Dale,

      Thanks for the thoughtful comment. Court may also chime in on this, but I’ll throw in my two cents to start.

      On her blog, Court has addressed many of the concerns you’ve brought up—there just wasn’t time to go into detail in the interview!

      I’ll link to some of her blog posts below, where she explains things further.

      Re: the USD holdings, Court writes on her blog that it’s about 70% of their portfolio, not 100%: https://modernfimily.com/what-is-our-fire-number-and-why/

      They also have a diversified portfolio with bonds, international, REITS, and other investments: https://modernfimily.com/quarterly-net-worth-asset-allocation-update/

      As for kids, you’re absolutely right that they’re not cheap. Our kids eat as much as adults, and at their ages (11 and 14) their travel costs are the same as adults. It’s pretty painful!

      However, I’ve found that the controllable costs of kids is where most parents get into trouble. This includes clothing, discretionary spending, activities, and education.

      My husband and I are extremely mindful and purposeful in these areas. So my rough estimate is that our kids cost us under $5,000 each per year. This includes all their expenses—even our biggest one, which is travel.

      So I’d argue that your $25K number is on the high side for FI-minded parents. But it’s probably on the low side for typical middle-class families who may be less intentional with their spending.

      While our numbers differ, I think it’s helpful that you shared your thoughts and numbers. This can allow prospective parents or those with younger kids to plan for a range of possibilities.

      Finally, re: working after FI, I believe that is definitely the plan for Court and her wife. But it’s out of choice, not necessity!

      Court’s a pretty smart cookie, and is amazing with numbers. So I have no doubt that the plan she’s laid out will take them all the way to the end, whether they work post-FI or not!

      Thank you for sharing your insight and experience, Dale. It’s important that all of us hear from different people, especially if their experiences and knowledge differ from our own.

  4. Thanks Chrissy, from that post “For my visual learners, the chart below depicts how heavy we are in US index funds. A large majority (86.25%) of our investments from stocks or bonds are in either a US stock market index funds or US bond market index funds.” And certainly a little chunk of that is in CAD Vanguard Fund.

    The US dollar is a sizable risk when over allocated, to a Canadian. Take a 50% market correction and add on another potential currency haircut of 20% or more. All of a sudden that would change one’s spend rate and emotional state.

    Court suggests she has too much in cash. That’s likely true. Cash goes backwards historically over the longer term in real dollar terms. I’d suggest a look at the equity glide path studies from Wade Pfau and Kitces. There’s nothing wrong with derisking before retirement, but we need a concrete strategy to get back in and get the stocks and growth potential back to the required level. We can’t wait for a sizable market correction, it might not arrive.

    Court greatly favours the US economy and workers and markets over Canada, me too over the longer term. It was suggested in that same post that US and Canadian markets move together. That’s often not true. Recency bias has us loving the US market coming out of the financial crisis, as it has destroyed Canadian and International markets.

    That said from 2000, 2001, 2002, the US markets delivered zero for ten year periods. The Canadian markets did quite well. If that event happens again it will
    end the retirement of many US investors with an over sized home bias, and not enough bonds. I talked to too many US retirees at that time who were sent back to work. Very sad.

    I write this often on my site and on Seeking Alpha. I’d suggest a trip to a retirement specialist, advice – only planner. And one with US/Canada cross border expertise. Jason Heath comes to mind.

    It’s great to be a self directed investor, but with respect to retirement funding we could all use the advice of a trusted advisor.

    It’s possible they’ve already paid for that advice, if so, great.

    And I mean no disrespect in this suggestion. I’d give it to myself, anyone.

    We can set our own traps with our own biases and we all have knowledge gaps.

    Dale

    1. Enjoyed reading through your two comments, Dale. I don’t have anything to add to the conversation but wanted to thank you for your insight and information. Your advice to speak to a advice-only planner makes 100% sense to me and I plan on seeking one out that has hopefully worked with early retirees before when I’m closing in on what I believe (and hope) is the end of my truck-driving career.

    2. As always, your comments are thoughtful and well-informed, Dale. You make some excellent, very rational points here. And I can’t disagree with you!

      Diversification is very important, even if we are confident in and bullish on US stocks. Thank you for sharing your insight. It’s appreciated and always welcome. 😊

    3. Hi Dale,

      Thanks for all these comments and thanks for taking a look into our blog posts regarding our FIRE number and expenses to further get a sense of where we are coming from. I appreciate you recommending Jason Health, like you mentioned it can’t hurt to get another set of eyes on our portfolio and to provide some insight we may not be thinking about.

      As for our portfolio, I am very satisfied with how things currently sit as we can withdraw the dividends from our index fund portfolio (roughly 2%) and never have to sell shares if it comes down to it thanks to our very low withdrawal rate and our low annual spend. We are heavy in cash for now for the first few years but the plan is to glide back to 90-100% equites in the next 5-10 years. I’m a Math and Econ major and have read the SWR Series by ERN whom I highly respect and am confident that we are in good shape with a 2% withdrawal in that we will likely not have to go back to work ever again in our life. So contrary to your note above, meaningful employment income will not be required. That being said, most of us in the FI space are very driven and focused and it’s highly unlikely that I won’t be doing something part time to bring in some sort of income. Who knows what the future holds. That’s part of the beauty to all of this. We can choose to work if we want to. And we can choose not to work too. Any extra income is just icing on the cake. Let the retirement police come knocking haha. The plan is to take time off while our daughter (and hopeful second child) are young and then once they are in school we will find something to fulfill each of us during the day while they are in school, be it paid work or not.

      As for child related costs, after speaking with other parents in the FI space, we feel comfortable with our estimate of $6,000/child/year and thanks to the Canadian Child Benefit (~$6,000/child/year) and our low annual costs, due to being valuists and cutting out the fluff, our child related costs will likely be a wash with the Child Benefit. Which is pretty incredible when you think of it. So far, our daughter is 20 months old and we have spent less than $1,700 on everything child related save for her food and RESP contributions. And I mean everything including diapers, wipes, nursery set up, car seat, stroller, clothes, books, toys, you name it. Some people can easily spend that on a stroller alone. Point being is that I think kids costs can vary widely and we are on team intentionality and minimalism and cannot foresee spending $25,000 in any given year on 2 kids. I’m sure we will spend more as our kid(s) get older and maybe you’ll prove me wrong but I highly doubt we will spend more on them than what we spend on the 2 of us adults in a given year.

      Thank you again for the comments and thoughts, everything you said is greatly appreciated over here!

  5. Hi Sam,

    Sorry for the delay, just seeing this! You’ve now found me two ways, awesome! I could go on and on about the US/Canada differences haha but healthcare is definitely the top one. Have you seen this hilarious video about people from the UK being asked what price tags certain health related costs come with in the US? (Not sure I the link I copied below will work.) Thanks for chiming in!

    Court

    https://www.google.ca/amp/s/www.newsweek.com/watch-british-people-react-cost-us-health-care-if-you-dont-have-money-youre-fudged-1475411%3famp=1

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