Jonathan Chevreau is a veteran financial columnist, blogger and author. He was personal financial columnist for the Financial Post (1993-2012), and editor-in-chief of MoneySense magazine (2012-14). Since declaring his Findependence Day in 2014, he has been blogging for the Motley Fool, Financial Post, and MoneySense.ca, and launched the Financial Independence Hub in 2014, a website that covers the topic from a North American perspective. He has published US and Canadian editions of his financial novel Findependence Day, and is also the co-author of Victory Lap Retirement. Jonathan was kind enough to do a phone interview with me. This interview was done on February 13, 2018 (Tuesday @ 1100). The duration of the interview was 25 minutes and 6 seconds.
Urgen Kuyee: Hi Jonathan, why don’t you let my readers know a little bit about yourself and how did you get into personal finance?
Jonathan Chevreau: I have been a journalist since 1979. I originally was a technology journalist. I started at a computer newspaper (Computing Canada) and at the time, there was a lot of computer specials on advertisement. So, the Globe and Mail hired me in 1981 to be their technology reporter. I didn’t write about money at all for a long time. Ultimately, I left the Globe and went into PR and ended up freelancing in technology. But, of course like all other people, I ended up getting married, buying a house and having a kid. Then, all of a sudden you start to learn about things like, at the time mutual funds. I also decided I wanted to go back to into journalism. I knew some people at the Financial Post (FP). When I was 40, I decided to go back into journalism and joined the FP in 1993. And, it was at that time I gradually took on the mutual fund beat. Somebody was doing mutual funds and wasn’t interested in them. Having started to invest in them and that led to taking over the personal finance column that Bruce Cohen used to do. That is the history. Now, instead of writing about technology, I write about money. And of course, as you might have gathered from the book, Victory Lap Retirement, I will be turning 65 myself in April. That does not mean I am going to stop just like you might expect with the book. But, working more on my own terms and my own speed.
UK: How long have you been writing for MoneySense and Financial Post?
JC: Well, financial post since 1993. I left the post in, when was that, 2012 because MoneySense hired me to be their editor-in-chief, which I did for a couple of years. And, then we decided to change the employee relationship to a contractual one where I gave them two blogs a week for the first year and that was when I took over an existing site, findependenceday.com. That site was just to sell the book, Findependence Day, both Canadian and US edition. It is a blue book. And, in 2014 to 2015, I went on my own and launched the Financial Independence Hub.But, I continued with MoneySense as a client and after the first year, we started to do this Retired Money column, which I still do. And, I started to write again for the FP. Actually, I also write for The Motley Fool Canada. I was doing a report up for them this morning. Also, I wrote some pieces for the Globe, which was again almost one of my first jobs. But, mostly right now for the post and MoneySense as you say.
UK: What are one to three books that have greatly influenced your life?
JC: Well, I always like the book called The Master Game written by Robert S. De Ropp. Its probably out of print now. It is a book about life games and life aims. He talks about the meta games and there are lower games as well. I mean Donald Trump would be a good example of somebody who pursues all the lower games, money, power, sex, and fame. So, De Ropp called it hog in trough, like a pig. Hog in trough was the pursuit of the money, Cock on dunghill, like a rooster was the pursuit of fame and some other games like that. Then, there s the meta games, basically the higher games which was you know higher consciousness, liberation or spiritual enlightenment. And, then in between there were no games, which were like the, household games, he called it. I was also influenced by quite a bit by Malcolm Muggeridge, the British journalist. Partly, because he was the writer in residence, I got to know and met him in 1978-79 when I was at the University of Western Ontario journalism school. I was just lucky that Malcolm Muggeridge was the writer in residence. If you don’t know Muggeridge, he’s passed away of course but he was the person who sort of made Mother Teresa famous. He was always sort of prophetic and his book, Jesus Rediscovered and he also wrote a book called Jesus: The Man Who Lives. I am a churchgoer as well, Anglican Church although it does not show up in my financial writing.
UK: What are some money and investment mistakes you made early in your life?
JC: Money mistakes early in my life. Well, I guess like a lot of young people, I didn’t really start RRSP until I got married. So, I guess it would have been when I left the globe in 84 so I would have been 31 years old. That’s when I started my RRSP, relatively late and that was only because I took their defined benefit pension plan and turned it into RRSP. Other than that, I mean have written, given a little talk on the fact that the biggest single mistake was probably buying apple computer very early, maybe $5000 in my RRSP long before the iPhone.
UK: You mean the apple stock, right.
JC: Apple stock, yes but I sold it a year later. So, that was probably a million dollar mistake if you look at the value that $5000 was now. So, like anybody we all make mistakes and I could probably come up with few others as well.
UK: In your book, Victory Lap Retirement – you mention that you declared your Findependence day in early 2013 on your sixtieth birthday, how did you celebrate?
JC: We had a party haha. We had a Findependence day party at our home here. I actually do, every five years I do one. So, when I was 55, we had a 55 without the freedom party. I was still at the post and it was just a joke about you know freedom 55. Investors group and London life financial has this phrase, Freedom 55 but people that retire at 55 are generally government workers with big pensions, big defined benefits. So, I had the 55 without the freedom and then, age 60 was the Findependence day. So, if you know the Findependence day book coverage, the US one has a better cover than the Canadian edition. It sort of shows fireworks and balloons on the cover. And, so I think we had some balloons and fireworks in the backyard for the sixtieth one. If memory serves, we still had some snow on the ground, so we had the fireworks that were actually planted in the hard, frozen snow in the backyard. So, that is how we celebrated Findependence day. That was the world’s first Findependence day party. For all I know, it is the last one.
UK: Very nice.
JC: And, then when I turn 65 in April, I may have one to celebrate, the fact that I will be collecting Old Age Security (OAS) so I will be finally collecting government money after all these years, finally at the trough.
UK: Do you mind sharing the numbers in relation to how much did you need in order to declare your financial independence?
JC: You are asking my net worth.
UK: Not exactly, maybe a round up number?
JC: Well, I don’t think I want that information out there in the public. But, I mean I don’t have big, huge define benefit plans so I think it is important to have your RRSPs maximized and maximize your TFSA as well. We have always maximized our RRSPs and my wife is still working, still has a job and she is still maximizing hers. So, you could probably make some guess but personally, I haven’t really RRSPed myself since I left MoneySense. So, I have been in the phase of semi-retirement as described in Victory Lap. I have actually started to withdraw money from my RRSP even though it sorts of rubs the wrong way. Because you get so used to anything, you have been so disciplined about your savings and living within your means but it is very hard for people who are good savers to actually watch their RRSP go in a different direction. But, basically I take out as much money as my wife puts into her so we are sort of breaking even. I also have probably written about this in MoneySense. If you can semi-retire in your 60’s, it is a good idea to delay receiving Canada Pension plan (CPP) to 70 because I mean I could have taken it when I was 60 but I didn’t. I still don’t take CPP. At 65, I could take it as well but it is gong to be 42% better by waiting another 5 years. And, in that time instead it is better to take money out of your RRSP if you are in a lower tax bracket than when you contributed which I am. However, as I said I am going to take Old Age Security (OAS). OH Yes! Also, it is better to wait if you can because it is 36% better if you wait till 70. In my case, the RRSP will probably be big enough that there will be a good chance that at age 70, 71 the OAS will be clawed back. So, it is not the same as CPP where CPP does not get clawed back, it gets taxed but it does not get clawed back. So, there’s not much point in trying to get your OAS 36% better for 5 years only to have it be worthless from 71 on because your RRSP got too big. So, hence that’s my personal plan and I have written all this mostly on the MoneySense retired money column and I have probably written for the Globe as well in different language and perhaps on the Post as well.
UK: What advice would you give to a smart, driven college student about to enter the “real world”? What advice should they ignore?
JC: About to enter the real world (Laughs). I mean there is so much advice. Hey, buy my books and visit financial independence hub. Learn about the concept of financial independence, which is all about living within your means. You have to save, the earlier you start saving, the better. And, the current blog that just went up today on the hub talks about how saving alone is insufficient for financial independence. Saving does not give you a big return, as you know interest rates are so low. You have to invest, you have to live within your means and consistently use what I call “guerrilla frugality” which is in the book and talks about being very frugal, super frugal, year in year out. Frugality to me is not something you do for a few years, it is a permanent lifestyle. You have to spend less than you earn, ideally 20% less. Then, you need to take that 10 or 20% but then you can’t just leave it in a low interest saving account. You have to actually invest it properly. I wrote a blog about two weeks ago about the Vanguard Asset Allocation ETFs. Personally, I think that for the TFSA in particular, a one-ticket asset allocation loosen this low cost like the Vanguard Conservative ETF Portfolio or the balanced one. You can check this on my hub or my last MoneySense column. They basically reran with my permission some of what I have written on the hub on this. So, for a young person looking for advice, you should start your TFSA as soon as you can. And RRSP will be good too at least once you are in a higher tax bracket.
UK: How many times do you write in a week?
JC: Well, financial independence hub has been publishing since November 2014. I think we have published 1200 blogs. Of those, maybe I write two or three a week but I have a lot of guest blogs as well. Generally, I will write for the publications we mentioned. Then, I will write a summary piece for saying here is a link to a Post piece or MoneySense column. Some people say its hard to keep track of where I am writing, because I write for MoneySense, I write for Globe and I write for Motley Fool. Sort of one stop shopping is if you subscribe for hub, it is free anyway. All you need is an email and there is this daily email digest that comes in and that digest will say, today I wrote for MoneySense or yesterday I wrote for the FP, here is my summary of what I wrote and here’s a link directly to the site.
UK: What is your writing practice like? Do you prefer writing in the morning, daytime or night time?
JC: Well, I try to work in, I mean if you look at the Victory Lap Retirement, there is a chapter or at least a portion of the chapter on the four-hour day. I always describe this four-hour day which is basically, so ideally for me I would write from 10 till 12, noon. And, then I will take 2 hours off. Either have a networking lunch or today, I am going to go to yoga that’s why I wasn’t going to talk to you much beyond 1130. And, then come back for a second session between 2 and 4pm. So, that means an ideal day for me would be working a four-hour day with two blocks because a creative person only has so much energy. They say even if you are composing a symphony, or you are a painter, you are writing a novel, which I have done, you have about 5 hours of really high, energy period of time. But even if you are a manager or a salesperson, I think a lot of people have to go to jobs where they think they are working 8 hours a day. But if you analyse what they are doing, you have a coffee, you sort of catch up with your emails, facebook and twitter. You are lucky if you get going by 10 and get in two real hours, the hours you are actually paid to do. There’s a whole section on Victory Lap Retirement about the four-hour day. My idea of semi-retirement is you take the four-hour day down to two-hour day. To me full-time would be five days a week of four-hour days, which is 20 hours. Again, I emphasize the work you are paid for, the stuff you can invoice. If I went from four-hour days to four two-hour days and taking Friday and Monday off or both. That’s my idea of, once I start collecting OAS and I am 65. That is my idea of victory lap retirement. You are still in the game, you still have contacts, you are still using your mind, and you have a little more time for exercise, networking and volunteering or catching up on your reading.
UK: You mentioned yoga. How has yoga benefited you or helped you to stay creative?
JC: Yoga is good for increasing your flexibility or joint flexibility, endurance and a bit of cardio. There is a book called Younger Next Year. In fact, we just created a Facebook group and Mike is part of it as well. It is an international group. I have reviewed the book, Younger Next Year right at the last blog of the year on the hub. And, if you go to that, you will see that I talk about this Facebook group called YOUNGER NEXT YEAR – 2018. In six weeks, we got 250 people. I am one of the moderators and the other one is this woman from Rochester. So, right off the bat we had Canada and States. Since then, we got international. People from Italy, Alaska and Europe but the point of it was that you asked about yoga, yoga is one of the things that Younger Next Year talks about and its mostly about exercise, proper nutrition, don’t eat crap and strength training. So, I joined LA fitness and I do strength training twice a week and plus, yoga three times a week. The benefits are you know its mostly fitness and mental discipline. Also, learning to meditate and calm your mind. But you get to an age when your joints and shoulders and et cetera, you fix it, you use it or lose it. You are in your late twenties so you don’t need to worry too much about this but personally, I plan to be you know by the time I am 65, I will be 62 and by the time I am 70, I will be 60. Thinking literally you will be younger next year by paying attention to your diet and exercise.
UK: Lastly, what are bad recommendations you hear in your profession or area of expertise? What advice should Canadians ignore?
JC: I am just writing a piece on motley fool based on Jamie Golombek’s five myths about RRSPs. CIBC did a poll that found a lot of young people seem to think that TFSAs are better than RRSPs, which they are in some ways. In fact, most Canadians should use both RRSPs and TFSAs. But, if the advice is you should not invest in RRSPs, then I would disregard that advice. I think that’s a big myth that the RRSP is no longer a valid thing just because TFSA is tax-free. But, people forget about RRSPs, the tax refund upfront and on going tax shelter. So, that’s what I would say. Ignore the advice that you should not have a RRSP. You should have a RRSP because what is the alternative? Non-registered investments are even worse. Plenty of tax every year on all dividend income and interest income and capital gains.
UK: Great. Thank you for your time Jonathan.
JC: No problem. Good luck.
You can follow Jonathan on twitter here.