By Sheryl Smolkin
This month’s interview is with author and financial journalist Jonathan Chevreau. Jon was the Financial Post’s personal finance columnists for nineteen years, and subsequently the Editor in Chief of MoneySense Magazine for two years until he declared his personal “financial independence day” on May 20th, 2014.
He has relinquished the leadership role at MoneySense, but as editor-at-large, his work is still frequently featured. He also writes for many other online venues and in November of last year he launched his ambitious North American portal, The Financial Independence Hub.
I last interviewed Jon for savewithspp.com in the summer of 2012 about his financial novel Findependence Day. Today I’d like to explore what he describes as “the profound difference between the traditional concept of retirement and the paradigm shift he calls financial independence.”
Q. To start off Jon, what is the difference between financial independence or “findependence” and retirement?
A: Well Sheryl, I always say that when you’re findependent you’re working because you want to not because you have to, financially speaking. But of course the lines blur. For the media and the financial service industry, it’s retirement, retirement, retirement. They don’t really distinguish between the two concepts.
For super frugal people, financial independence can often occur decades before traditional retirement. When you talk about the “early retirement extreme” movement, what these people are really talking about is being financially independent.
Q: So in fact you have coined the term findependence to apply to people at various ages, not just older workers?
A: Yes. The Financial Independence Hub is relevant for people at all stages of life.
Q: You’ve left the corporate world. But you seem to be busier than ever, with all of your freelance writing, your blog, and spin-offs from your book Findependence Day. How would you describe your current status?
A: Busier than I want to be, really. I think you can relate to that one as well. On the Hub I reviewed books like Encore and I talk about this new phase of life. If you believe in extended longevity and a lot of people leave corporations, either voluntarily or involuntarily, in their late fifties, early sixties, I say there’s a fifteen to twenty year sweet spot.
You’re no longer an employee, but I don’t think you are ready to take year-long cruises and do nothing but watch TV, play golf, read and play internet bridge. I think that fifteen year period, is the new “encore stage.” You could also call it part-time or phased retirement.
Q: How many hours a week do you estimate you’re currently working for compensation and on your own projects?
A: I got into this in December (2014). I read a bunch of internet books. I was keen on “Multiple Streams of Internet Income” by Robert Allen, and a book by Tim Ferriss called “The Four-hour Work Week.” I decided by having more passive income and less renting my time out, I could go to a four-hour week. Unfortunately, it hasn’t really worked out.
It turns out that the path to a four-hour workweek for me is a nine-hour day. I would say that I probably still spend 40% of my time on the MoneySense blogging contract. Another 40% is spent on the Hub which is not billable time. About 20% of my time is taken up with other things like one-off speeches, book sales, blogs and articles.
Q: What are the pros and cons in your view of your current working arrangement, as compared to working as a full-time salaried journalist?
A: As a freelance contractor there are no employee benefits, sick days or paid vacations. I had a “man cold” last week and I had to barrel through it. Luckily, of course, I don’t have to commute.
It’s hard to match my previous gross income but it can be a little bit better on an after- tax basis depending on the legitimate employment expenses I can write off. When I balance it with the lack of commuting, I think it’s a better life-work balance. But like anything else, there are trade-offs.
Q: Do you think that Canadians across the board are working longer and contemplating encore careers, or is this really restricted to knowledge workers and entrepreneurs?
A: Well I think that’s an apt observation. When you’re a knowledge worker there’s a real blurry line between working and playing, because I think we actually find it quite fun to absorb lots of information on subjects that fascinate us. Whereas, as you point out if you are a labourer, the body is not as apt to keep on going past sixty-four or sixty-six.
Q: Youth unemployment is running around 14 %. Are older workers, who continue working, clogging up the pipeline for young people and mid-career workers who are trying to get a leg up on the employment ladder?
A: Well that is one perception I’m not sure is true. I suppose if we’re talking about a big corporation with your traditional pyramid, where basically there are only a couple of people at the top, then yes, older workers might be clogging up that traditional pipeline.
But I think when you’re talking about all the people leaving companies and then contracting back their services, at that point they just become a valuable asset. Younger people can still move up the ladder, and they can still access the expertise and skills of the older codgers, like me if they are retained as freelance suppliers to the company.
Q: Some people opt to work longer for their current employers or continue on a contractual basis. Then there are others who want more flexibility or to try something new. How can older workers go about finding an encore career?
A: They can go to findependencehub.com and check out the book reviews. Encore, the Big Shift, there are tons of these books out there. For some it might be going back to school, getting an MBA. A lot of people make complete changes. For example, Eleanor Clitheroe left Ontario Hydro and went to divinity school.
I have a friend who is actually downsizing and moving to the country, so that he can go from being a set designer to doing true art. Every second journalist I know wants to write the great Canadian or American novel. I compromised by writing Findependence Day which is a financial novel.
Q: Money won’t buy happiness but it helps. What are some of the factors that you think contribute to a happy retirement, other than having enough money?
A: There are obvious things. Health, happiness, relationships, family, networks. There’s a book by Wes Moss called “You can retire sooner than you think.” One of the things he talks about is a retiree should have at least three or four passionate interests. This is why I decided to put internet bridge back on my list. Reading, volunteering and exercising would be others.
I think the biggest single thing is of course your partner. I’ve talked to people in the financial service industry, who’ve been divorced. They say the biggest mistake they ever made financially-speaking was to get a divorce, because their net worth was cut in two right off the bat. But obviously you don’t stay together for financial reasons if you don’t have a harmonious relationship.
Q: Well the relationship issue is interesting and I think one of the things that I think about all the time, is you don’t know how much time you’re going to have. You’re worried about financing thirty years of retirement but who knows if you’ll have it. So if you put it off and you put it off you just might miss those golden years.
A: Various people have joked that financial planning would be the easiest thing to do on Earth if you just knew when you were going to die. Unfortunately, most people don’t.
Q: How long do you think you will continue to work? Do you see full retirement any time in your future?
A: I have a vision, that eventually I will have a website that brings in lots of passive streams of income. My idea of a nice retirement or findependence is every three years, to leisurely write a book working four six-hour days a week. Then I would go on tour to promote it and bring in another stream of income. Instead of grinding out words for multiple clients I’d like to be financially independent enough to work on one big project.
Q: Thanks very much for talking to me, Jon. It’s always fascinating to talk to you.
A: Well thank you for allowing me to share some of my thoughts, Sheryl. I think you’re doing a great job, too, on Retirement Redux.
This is an edited transcript of a podcast interview of Jonathan Chevreau conducted by telephone in March 2015.