066: Mental Health Challenges and Finding Balance | Learning to FI

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Chrissy
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Chrissy
Okay, we are back. And now we’re going to switch directions a little bit, I want to mention a fun little calculator that Sterling has on his website. It’s The Savings Calculator. And what it does is it takes the future value of something that you spent and the money that you spend now and how much it will add up to over 10 years. So you can adjust what the payment is the frequency, whether it’s a one-time purchase, or something that repeats over time. And it’s kind of astounding when you enter your numbers in there. And it’s shocking to see how much it can add up to so can you tell us a little bit more about the idea for this calculator and why you think it’s useful for people to dig in and take a look at it?

Sterling
Absolutely. Yeah, this was the first calculator that I put on my site. And again, it is an extension of Mr. Money Mustache, his idea of his short-termitis post. So just took it one step further, he gave some, you know some number multipliers or you could just just you know, times it by 752. And that gets you to I think your your weekly 7% How much the value would be after 10 years. So this one just allows you to, to play with more numbers, you can change the frequency whether was a one time purchase or daily, weekly, bi weekly. And they give you five different things that you could kind of all add and stack on top of each other to see how that how that shakes out after 10 years. So it’s you know, maybe you defer a purchase. Well I guess you’d have to defer the purchase for 10 years but if you defer a purchase or you reduce your spending, you buy one last coffee a day or you reduce your cable bill by $50 A month or whatever it happens to be and keep that all in there and see if that was invested at 7% for 10 years where could that money What could it be worth at that point?

Chrissy
Yeah, when you you have some sample numbers in there and it’s just pretty regular stuff that people spend on… $1,500 for a new couch one time and the hot holidays you say 5,000 bucks a year on on the holiday gifts and food and all that and cable TV for 100 bucks a month cooking or not not cooking. I guess you’re eating out 50 bucks a month and then three bucks daily for your caffeine that after 10 years adds up to $113,851. That’s significant. And I think I think a lot of us, we spend this money without realizing the long term impact of these small and larger purchases over time.

Sterling
Yeah, absolutely.

Money Mechanic
I just did some quick math, I was thinking about 15 bucks is probably pretty normal for people that are out for lunch, you know, if they’re away from home for lunch, 15 bucks a day. So the quick math on that is 78 grand. And that’s without earning money on it. That’s just the straight costs. And it’s interesting, because you put those savings multipliers in there. It’s a quick mental thing, do I spend this every day. So if I times this by ballpark, 5,000 or 5,200, whatever it is, that’s like, you can instantly kind of go, Huh, that actually is a lot of money over a long period of time, I like this kind of it, this is one of those sort of underlying FIRE FI kind of mindset shifts that you need to make. And we can come back the other way and say, well keep spending on what you value. But at least this gives you the understanding of what that long term cost is right? Do you still apply that in your regular daily life? Or is this one of those over optimization things for you, Sterling, where it’s like, I need to step back from multiplying everything by these numbers,

Sterling
This was one of the cases where I stepped back a little bit, I still think of this with every purchase, it’s part of my, whenever something’s coming up, but you’re not going to defer a coach purchase for 10 years, it might just be might just be two years, right? Or that that sort of thing to the kids are a little bit older. So it’s it’s making some assumptions that that remains the same for that for that full 10 year period. But yeah, this was a huge focus of mine. When I first started, this is what caused, you know, the rift between my wife and I had it me trying to, you know, like, pull back on how much we’re spending on things like in the idea isn’t to eliminate all these things that you value. But realizing if you eat out less like one time less a month, which is $50 $100 a month, but you do that for 10 years, that’s just a habit change, which you can extend. And that can easily add up to tens of tjousands of dollars.

Chrissy
Yeah, and even simpler way to figure out the math. But let’s say you cut out an expense, that’s 1,000 bucks a year, you multiply that by 25, that’s $25,000 less that you need to save in your nest egg to reach FI. So that is, I think a really quick way to measure it and say, Oh, that could cut 25 grand out of the number I need that that’s significant. So you can turn it into a positive thing. But again, if you obsess, get too crazy about it, it may not be the healthiest way to approach the FI journey.

Sterling
I really like that. I look at it the same way is for whatever your spending is for retirement, if you can cut off $10,000 of spending, so go from $100,000 spending to $90,000 spending, that’s $250,000 you don’t have to save.

Chrissy
That’s massive, right? It’s a lot.

Money Mechanic
And I think these these, you know, this kind of ten-year mindset and the savings multipliers. They may sound difficult to use at the beginning for people that are new on the journey, but they become more automatic it once you’ve built in the habits, like Sterling said is you can go okay, I need to step back a little bit from this and not you really hyper scrutinize everything that you do. But it becomes more automatic that you just kind of think of something on. Oh, I’m paying that every week. So that’s going to be X amount over a period. You don’t have to spend as much mental bandwidth on it because it becomes familiar to you.

Sterling
Yeah, exactly.

Chrissy
Do you still feel like you’re in the danger zone where you could go back to that where you’re teetering on the edge between deprivation and healthy frugality? Or do you feel like you’ve learned the lessons and that you’re not really going to fall back into the same traps.

Sterling
I think there’s ebbs and flows, I wouldn’t necessarily considered a trap. As I said, my anxiety is being managed right now. So I can look at things with a much clearer so no, I don’t see myself falling back into that. But I kinda ebb and flow between, I really want to focus on investing, I’m going to, you know, spend this month I’m gonna have to make a no spend month and just do that periodically, rather than trying to do it every month, which was not healthy.

Money Mechanic
I have a question for you. Just wondering about, you know, we’ve had quite a few content creators on the show before and then a lot of people that, you know, don’t have a creative outlet for their FI journey. Was starting the blog, something that you did, because you wanted to educate others, or was it more of a bit of a cathartic thing for yourself to work through your thought process and your own journey?

Sterling
For me it was to help others. I wanted it to be a place where I could refer friends and or other colleagues to say, Hey, you don’t have your financial health in order. Go check this out. It’s actually really easy to start. You don’t have to pay these high fees. And you can talk to a financial planner in 20 years, but right now, you could do it yourself and set it up.

Money Mechanic
Yeah, I was wondering when you know you’ve shared a fair amount of personal information in your in your updates there. So I always wonder when I see that in people’s content, whether they’re putting it out there for others, or almost putting it out there for themselves, as you know, a bit of an introspective look and say, Hey, this is this is what I’m doing, not as a as any kind of comparison, but as a way of just sharing with the community.

Sterling
Yeah. And that in that part, it was for both it was to show what I’m up to, and also that cathartic part to talk about. But I noticed that the mental health isn’t really discussed in the FI community. So I wanted to bring that forward to say, Hey, this is what I’ve seen in myself, this is what I’ve learned. Other people may be going through similar things, or have, you know, similar stuff holding them back that I did in the past. And, and it’s okay to take it slower, you don’t have to do it all today. You don’t have to optimize everything. Ideally you want to. But if you need to take a break, if you need to pick off one thing at a time, that’s totally reasonable. It’s all depending on how you’re feeling. And it should be tied in with that mental health. aspect.

Chrissy
Yeah, I really like the tone of your blog. It’s very friendly, approachable, it’s like a friend guiding you through, I really do feel like it serves that purpose that you wanted to be able to just steer people to the website and just say, Read this. And you’ll, you’ll figure it out just by reading the, you know, getting started kind of articles that you have on there. But I feel like the tone in all of your writing is very much like I’m with you, I’m here, I can help you. Whereas I think other people have more of like, I’ve been there, done that. And now you listened to me. And it’s not like that at all at all when I read your material. And I think it’s nice to have that sense of community. And I know that you also value a lot of the community that’s in the Canadian FIRE space. For instance, I know you regularly meet with one of our old friends, Mr. Prairie FIRE. I think it’s so cool. I’d love to talk to him again. It’s been so long since we last chatted with him.

Sterling
Yeah, actually, I just hung out with him for a few hours a couple days ago.

Chrissy
Very cool. How’s he doing?

Sterling
He’s doing really well.

Chrissy
It’s nice to hear.

Money Mechanic
Did you have a craft beer?

Sterling
I did.

Money Mechanic
I’m jealous we’ll save that for outside the episode.

Chrissy
Yeah, so can you tell us more about how you you reached out to us, when you join the community and you started getting more involved. You’ve been reaching out to a lot of people. And it feels like to me that you really value that those connections with the people. And can you tell us a bit more about how that has affected your journey into FI?

Sterling
Yeah, so kind of taking it back to like when I first started the blog. Like I said, I started a few years ago, like I’ve, I signed up for a three year domain registration, which I’ve already renewed, so that that’s how actually how old it is. But I didn’t really start publishing content to a year and a half, after I had initially done that. And the funny thing is, yeah, I reached out to Mr. Prairie FIRE and talked with him years ago, before I was actually really really publishing things. So that kind of that started there. He’s from the same city I’m from so we happen to run into each other in person. And I recognized him from Facebook profile, chatted with him there and stuff. But so we recognize each other just from both posting on the group. But yeah, it’s important to me in making the connections with people like yourselves, and other ones to expand the expand your social network, but also get different perspectives as to because not everybody wants to be a passive index investor, like myself, and just set it and forget it. That’s just what it is. Some people want to be way more active with stock picking, or they want, you know, sector ETFs, or like, whatever it is real estate, there’s so many different avenues. And I’m interested to learn more about them to understand what’s driving people towards those types of things. And then if somebody comes to me with a question, like from the blog, or that I can kind of speak to it and point to it, I wouldn’t be an expert, but I could then pass them on to somebody else that may be able to help them. dividend investing is another big one.

Chrissy
Yeah, I agree. I find that the community it, it really is there to help and I find very few people are in it just to take most people are in there to actually give to others and help lift each other up as we all go move along this journey. And I think there’s so much value in connecting with that community. So if anyone out there is feeling alone in their journey, because I hear this a lot when you find FIRE, you feel very alone, because very few people know about it. And mainstream media portrays us as this fringe movement. But really when you find other like-minded people, it’s so powerful to know that you’re not alone and you’re not crazy for doing some of the things you do and it actually works, right? To actually meet people who have reached their goal or who are getting close to it. You realize it it does work and you can apply it to your own life and seeing a variety of people do it, that helps as well.

Sterling
And one of the things that I’ve done in shifting my approach with interacting just with people who aren’t in the community, is I used to talk about that savings calculator and be like, Hey, did you know if you don’t have that Starbucks every day, you’ll save this amount of money that I, you know, that’s not even worth it to me. And they just disregarded hand waved away. So I’ve changed the approach to meet to say, Hey, did you know that investing is super easy? You can just do that. And then kind of transition towards like, how do you get more to invest is, oh, here’s some other concepts that you can do. So kind of change the tone, because I found other people would just push back so hard on, you know, saving that coffee, that’s I’m not going broke. Because I’m spending on Starbucks.

Chrissy
Oh, that’s like the stick, right? You use more of the carrot, which is the the treats of earning money from your investments, rather than the stick of you know, you got to cut back, you got to cut back.

Sterling
Exactly.

Money Mechanic
Does any of this tie into… so coming back to this list of books, because it’s where I’m interested here. And this one is there’s another one on here called The Scout Mindset. And what we’ve just been talking about, just in the last few minutes is about a little bit of changing mindset, recognizing biases, recognizing when you’re wrong, things like that. What were there, this book sounds like another one I’d want to read to give us a little bit of a rundown on that one, how changing your mind is important.

Sterling
Yeah, absolutely. So one of my interests is critical thinking and skepticism. And like science, literacy is another one. So on my blog, I’ve mentioned numerous times, and I’ll tell anybody that listens. My favourite podcast is The Skeptic’s Guide to the Universe. And so I’ve been listening to that for about six years. So that kind of really set the foundation for me to understand, you know, what are logical fallacies and biases? And how do they play into things? How can you take science literacy and under, understand the world around you. So related to finance, it’s very difficult to do critical thinking around, you know, financial things like what’s better real estate investing, or is dividend investing better, and everybody has their own biases. So this book, “The Scout Mindset”, is just kind of an additional piece to that. And so the author kind of makes it very approachable as to how do you approach the world do you have to actually say, like, hold your hold your opinions, lightly, hold your identity lightly. And be open to input be open to opposing views, to try and understand you can take what you want to apply to your, your own decisions and your own how you how you view things, but it’s, there’s a lot of good examples in there on how cognitive biases just play into your everyday decisions. And, and kind of the definition of the scout mindset. As she says, it is what allows you to recognize when you’re wrong, and seek out your blind spots, test your assumptions and change course.

Money Mechanic
I like that.

Sterling
So the critical thinking piece is a personal interest of mine, which I kind of, you know, self-study a little bit on the side. But it’s also very closely related to my job as well with being being an analyst. And the type of work that I do is constantly challenging assumptions and trying to find out more information.

Money Mechanic
And you also mentioned that you’ve been working a lot on project with diversity and inclusion. So that kind of this seems to dovetail together a little bit with that.

Sterling
Yeah, it does. Our my organization actually started some book clubs and, and diversity inclusion is is a huge program that trying to, to expand on and get more people involved. And, and I was fortunate to have a work colleague, get me involved in that. And yeah, I’ve joined the three book clubs and learned a lot. And it very much ties in with how do you challenge your own biases and assumptions Absolutely. ties in?

Money Mechanic
Mm hmm. So what is the what are those? The association that group talks about when diversity and inclusion?

Sterling
Yeah, so the the book club isn’t specifically talking about, you know, critical thinking, but he’s talking about biases. And and they’re so they’re, they’re closely related. So as a separate initiative related to that diversity inclusion, we’re also having bias training at work, as well. So so that dovetails into into each other. So yeah, there’s there’s overlap there.

Chrissy
Well, I think it’s nice to hear that this kind of training is going on. It’s there’s so much happening in our world right now. And I think the more all of us learn about diversity and inclusion and all these kinds of issues that they’re like they say, it’s intersectional. Everything affects everything else. So I think it’s great that you are sharing this information. And on your blog, you actually have sort of a reading list of the books that you’ve been reading lately. And you have how… is it three, three books here on diversity and inclusion that I haven’t heard of any of these ones, and I’ve been reading a lot of books on this kind of in this area lately, and I’ll definitely be adding those to my list. So go check out Sterling’s blog if you want to check out the books that he’s been reading

Money Mechanic
I’ve got to get better at my audiobooks, apparently, because my reading list is so far behind.

Chrissy
You gotta. That’s that’s the only way I read now.

Money Mechanic
I gotta 8x time audiobooks, like the auctioneer talking in your ear the whole book in under 10 minutes. Sterling, before we let you go, can you share with us? This is across Canada podcast, right? So we haven’t identified exactly where you are. But you’re central Canada. Are there anything about your lifestyle there in particular that help you? Or are an advantage to you? Or what are your local hacks for your FI journey? You said you had kids. Is there something you can throw out there for our listeners?

Sterling
Oh, I don’t think there’s anything that’s regionally specific, but we’re not in a high cost of living area. So that’s also a huge benefit. But yeah, using your, your local resources, your library, your, your free parks, so that we get cold winters here. So there’s, it’s make sure you’re investing in good winter clothes and enjoy the outside.

Chrissy
Yeah, that low cost of living certainly helps. And now, and I’m assuming because you’re working from home, it’s probably easier to find employment, even if it’s not right in your area, nowadays, with COVID, allowing people to more and more people to work from home. So even if the cost of living is lower there, you can probably find the income that is higher. And so you’re you’ve got a bit of that geographic arbitrage going on.

Sterling
Yeah, that’s definitely a huge benefit. Unfortunately, I’ve been with my company for quite a few years. And, and this just pushed the policy forward to be able to work from home and I’ve, I’ve really been enjoying it have I work with, with people on a regular basis and lots of meetings and discussions. And yeah, it’s it’s been a good experience working from home.

Chrissy
Yeah, it’s good for podcasters like us, too, because we can talk to people in the middle of the day more easily.

Money Mechanic
Okay, here’s one for you. Low Cost of living area, does that make you pro pay off the mortgage first or pro invest first?

Sterling
Invest first.

Money Mechanic
Okay.

Sterling
Yeah, with mortgage rates still low? Yeah, it’s, it’s all about investing the opportunity cost of, you know, easily a 5% difference? That’s, I can’t leave that on the table.

Chrissy
Yeah, you’re even thinking of dipping your toe… or have you already started the Smith Manoeuvre?

Sterling
I researched it. But there’s lots of pros to it. And it actually came back to me being the single point of failure to executing all the trades and, and doing all the maintenance of that, because I want to do it myself, the tracking your adjusted cost basis, and that I’ve done that before. So that’s, that’s not a big deal. But my wife being more risk adverse. Me I already have my plan as to what my Couch Potato portfolio, and like it’s a 75-25, split equity and bond. And, and so this maneuver would add a layer of complexity, which if I was to fall back into the ways where I didn’t have the mental bandwidth to necessarily keep up on these things. I didn’t want that to be a cause for concern. So so right now I’m just holding off on it. Plus, I don’t have a real advancable mortgage.

Chrissy
Yet smart decision, it’s not a simple thing to do. So you really have to sit down and and think about if you’re ready to take it on, if you plan to DIY it, I made the decision to not DIY it, because as you mentioned, there’s a lot there to deal with. It seems simple, but there’s a lot a lot under the surface.

Money Mechanic
I think we can wrap this up Chrissy with identifying that certainly his blog is called Learning to FI because this is a learning journey. And you put that right in there that you’re still figuring things out as you go. So all the listeners that are new to this or been are in the doldrums or wherever they are. We’re all just learning to FI so where can people find you Sterling?

Sterling
Generally on Twitter? That’s the only place a lot. So it’s a I believe @Learning_to_FI.

Money Mechanic
Okay, and the blog is, is it .ca or .com, you’re .com. LearningtoFI.com

Sterling
You got it. Awesome.

Money Mechanic
Chrissy, parting comments.

Chrissy
Thank you very much, Sterling. Again, thank you for your courage and sharing your mental health journey. I think more of us need to be talking about that to normalize it for people who are maybe struggling on their own and not realizing that there are others out there like them. So I think you’re a friendly voice in the community to reach out to if anyone has similar struggles. You’ve always been very kind in how you reply to other people in our group. Choose FI Canada. So I hope that others can learn from you and take some hope from hearing how you’ve found your way to the other side successfully. So thank you for coming on.

Sterling
Thank you so much.

Money Mechanic
Thanks, Sterling. We’ll see everybody on the next episode.