Wednesday, November 26, 2008

When I Stopped Working in 1999

In 1999, when I got laid off work, I knew that I had reached my investment goal, but at first, I did not think I could stop working. My salary was higher than I thought it would be and I thought I would need more income from my portfolio to retire. Also, my son was about to go to college.

I had always used spreadsheets to try to establish where I am financially, so here again; I tried to gage where I was. I used my previous tax package of 1998 to try to figure out what my taxes would be if I had no job and lived off my investments. I was very pleasantly shocked. If you do not work, you do not pay UI or CPP and if your income is mostly dividends rather than salary, taxes are a lot less.

Half of my investments were in trading accounts and half were in RRSP accounts. I realized that I should be taking money out of my RRSP accounts so as not to run down my trading accounts and keep some sort of balance between the two types. However, even doing this I found that, while there was a big gap between my gross income, before and after if I stopped working; it was a different story concerning my net income. There was no gap in my net income. In fact, I could spend a bit more.

This was the reason I felt I could stop working and therefore, I stopped looking for work. Now some 9 years later, and after two bear markets, I have more money than when I stopped working and I have lived off my investments quite nicely for these years. Hopefully the next 9 will be just as good.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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