Can You Reach Financial Independence Without Buying A Home ??

So guys let me tell you, the last podcast episode I posted, and one of the shorts from that episode, got some people feeling incredulous – meaning didn’t believe what I was saying. 

I’ve stated before that I am not a financial guru. I did not grow up with a clear concept of money and knew nothing about investing. 

I’m just an elderly millennial, trying to become financially independent and figuring out things in real time.

I posted a reel stating that your primary residence does not produce income and does not pay you monthly. I also sated that it doesn’t fund your retirement, unless you sell or downsize and maybe use the remaining money to put into investments. 

Someone from my childhood direct messaged me stating that you could rent out a portion of your house out – but then stated that with the current interest rates at 4-5%, to purchase a 700k home, you need to 2-4 incomes.

I don’t know how much rental space you would have renting a 700k home in Greater Toronto Area. I guess if you move out further away from the city, that is a possibility 

In the reel I shared the 20/30/3 rule to purchase a home. The rule states that you should have a 20% downpayment, a mortgage payment being no more then 30% of your monthly income and the value of the home, being no more than 3 times your annual salary.

I had someone message me saying that the rule is not realistic right now with the current economic conditions. Saying that “our” income was never that high and home prices are never that low. I respectfully disagreed with him and stated that people make their own choices. 

I don’t think I make a crazy amount of money and I purchased my home using thw rule. When I purchased my condo, I wasn’t at that 30% of a income to start, but I did double my income, and my mortgage payment was below 30% of my monthly income.

I also had someone comment on TiktTok.

I guess he means when you sell your primary residence. I was a little confused by the comment. I asked for some clarification, but have yet to get response.

Now I get it. It’s only a 30 second clip and these individuals probably haven’t watched the full podcast, but I do notice that home ownership seems to be a really touchy topic.

I don’t think it’s neither a good or bad thing, but I guess for most people, they don’t understand the lens that I’m looking through at as someone who is trying to reach financial independence. 

I’m just looking at what people who have achieved it have done, doing my research and not trying to reinvent the wheel.

The last episode was all about the asset allocation of the financially independent people in Ontario. Diving deep and seeing how their net worth was allocated.

I talked about a Toronto couple, Kristy Shen and Bryce Leung who achieved financial independence in their 30s.

I watched a podcast they were on and just purchased their book. I want to go into their details on how they did it.

I wanted to share a quick two and a half minute video they were featured in on CBC almost 9 years ago. 

 Renting vs Buying a home 

At the beginning of the video, they talked about buying a home. It seemed as they wanted to buy it cash, but the home prices just kept going up. 

I must say, good on them. Wanted to buy a home cash is no joke.

Saving 500k

Now I know when people hear this, there like what ?!?!?

But in the video, they claim is was nothing crazy about what they did.

I’m eager to see what steps they took to save this money when I drive in their book and get the details. 

Finding Financial Independence 

They probably stumbled on investing when searching on what to do with their large pile of cash they saved up. 

She takes about the 4% rule which is a guideline in personal finance and retirement planning. It’s to help figure out how much you can safely withdraw from your investments each year without running out of money. 

Million dollar home vs a million dollar portfolio 

This was interesting as i stated earlier, a lot of people commented to me about this.

The million investment portfolio pays you. The Million dollar home, you stay and have to pay for taxes and maintenance. 

I had someone in my comments saying that they refinanced their home and purchased other properties and that was all possible due to his primary residence. 

That is true, as I did that with my condo, but you have to take on more debt. In Canada over the last 5 - 7 years, most people who own homes, have not gained much home equity.

 Anyone Can Do It 

I know when people hear this they may think, yea right. They were lucky.

Even when I talked about the reel earlier, people were defensive from the get go.

They key point I think they brought up is anyone can learn if they want to.

Just like the comments, how many those people know about financial independence ? The F.I.R.E. movement. Do they know theres a whole community of people doing this? 

Do you invest ?

What’s is your investment strategy ? 

Is the stock market only for rich people ?

People lose money all the time investing ? 

All these questions and concerns that myself and people may come up with.

They have a great blog / website(The Millennial Revolution) where they talk about F.I.R.E. and are helping people everyday.

Im excited to get in their book and share what I find with you guys.