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Five Year Plan

My journey to financial independence can be traced back roughly to the year 2006. To my best recollection I was around 19 when I first stumbled across the book, Guide To Getting Rich by Robert Kiyosaki. It is one of Kiyosaki’s lesser-known titles and certainly far less heralded than Rich Dad Poor Dad which is known to just about anyone with a remote interest in the personal finance field.

At the time I was walking through a local bookstore when the title caught my eye. To that point most of my reading had been devoted to philosophy and classics, though I have always kept a wide range of interests. Frankly, the thought of a guide to achieving wealth sounded like sensationalism intended to sell copies.

Nevertheless, I picked up the book and read through it in entirety while sitting in the bookstore. I was hooked from that moment when I realized that what I was reading simply made sense. I bought the copy and took it home for further examination.

From that time I have been reading everything I have been able to get my hands on related to personal finance and wealth building. What I have learned is that the road to wealth takes a combination of two simple factors. First, one must believe that becoming rich is not only possible, but also necessary. Second, one must take actionable steps by creating a plan to achieve realistic goals that are also challenging and meaningful; with money as anything in life, if you get bored or lazy, you lose.

Two Paths to Freedom

When it comes to money there are two sets of belief systems that tend to prevail. On the one hand many people will say that, “Tomorrow is uncertain. Saving for the future at the cost of enjoying today is not worth it.” The opposing party declares, “It is likely that I will live a long life barring unforeseen circumstances. Since this is the case, it makes sense to set aside money now and to make it grow so that I am able to financially sustain myself and enjoy my golden years.”

Neither point of view is wrong. They both have real merit.

Over time I have come to realize that there must be a balance between putting one’s head down to the grindstone and working in earnest simply to save for the future versus working too little and struggling financially through life. As I have built my financial house and gotten my affairs into the best possible shape, I have reached a point now where I realize there will be a sweet spot of financial freedom just a few years down the road.

Financial Freedom and Semi-Financial Freedom

Before digging too deep into the plan, allow me to introduce clearly what I meant by “Financial Freedom” (FF); FF is the state one reaches when their monthly (or annual) passive income exceeds their monthly (or annual) expenses. At that point, one no longer has to work to earn a living or paycheque to finance their lifestyle.

Semi-Financial Freedom (SFF), on the other hand, is the state one reaches when they are able to sustain their lifestyle and cover all expenses through only very minimal exertion. In other words, it is the state reached when passive income covers a significant portion of expenses and the individual is able to either choose to work less by reducing hours of employment, or simply be more selective about what it is they choose to work at full-time. SFF involves being in the driver’s seat of life and having the ability to decide how to spend one’s time without waiting for complete FF. It balances the now with the then.

I have chosen to use the term “Semi-Financial Freedom” because I dislike “Semi-Retirement” and what it implies. Make no mistake about it, when I achieve SFF, I intend to be as productive as ever. I have never enjoyed the image of retirement as fading away into the sunset once one’s days of creative activity have ended. That isn’t me now and it won’t be me then.

My Five Year Plan

Allow me to introduce my five year plan. The plan will commence January 1, 2016, and run until December 31, 2020. In other words, it will be complete by January 2021 and I will be Semi-Financially Free by that point, to the extent that I will be hugely in control of my time and life, financially speaking.

I will list my current fixed expenses, discretionary expenses, and planned future income.

Current monthly fixed expenses –

Rent: $742

Truck Payment: $520

Truck Insurance: $120

Renter’s Insurance: $20

Cell Phone: $80

Internet: $80

Total: $1,562

Current monthly discretionary expenses –

Groceries: $250

Gas: $150

Miscellaneous: $200

Total: $650

Grand Total of current expenses: $1,562 + $650 = $2,212

Planned monthly future income –

Earned income (work): $1,200

Dividends: $400

Writing/Freelancing: $300

Total: $1,900

Taking the two totals together, I would be $312 short of making this work. However, the sweet spot occurs shortly after my truck is entirely paid off during the Summer of 2018 and I am able to divert over $500 in truck payments to my investment account. That amounts to over $6,000 of additional investment dollars to supercharge my dividend income. It also means $520 monthly falls out of the expense column. So, $2,212 – $520 = $1,692 of anticipated future monthly expenses.

Tallying the totals again gives us… $1,900 – $1,692 = $208 of extra income.

Some important considerations:

  • In these estimations, I understate the potential I have to earn from writing and freelancing. As I demonstrated in this article, I have previously earned over a thousand dollars in a single month from writing income. In a future scenario where I am potentially working less hours, it would be quite easy to simply turn that faucet up and earn far more than $300 monthly.
  • Earned income is estimated at $1,200 which would be very easy to do with a part-time arrangement working 15 hours or less per week. The average “full-timer” is paid for 37.5 hours while actually working around 40 hours (many employers provide unpaid lunch time).
  • I am currently paying more in rent than I could if I decided to move locations. My current rent factors in all expenses of living aside from internet, which I pay for separately.
  • I am no longer under contract with my phone company and am simply paying too much. Complacency is the only reason I am still shelling out so much. Within the next month I expect that to drop to around $50 or less monthly which would see my monthly expenses reduce once again by $30.
  • My internet bill is too high, similar to the cell phone situation. This is another area I could save significantly. It is a matter of making a few phone calls.
  • Assuming my driving record continues to be excellent for the next few years, my truck insurance payment should decline.
  • The dividend figure that I am aiming for of $400 per month actually includes interest that I earn on cash holdings. I always keep at least $10,000 liquid. This is “sleep-at-night” money which gives me an added layer of security in life. Since I can always expect to earn a small return on these funds, I include them in my passive totals. I refer only to “dividends” since this is the vast majority of the income in this category.
  • The plan only actually “begins” at the start of 2016 and I anticipate I have significantly undershot my dividend earning power for 2015 heading into next year. Starting from a larger base, it will be easier to achieve the stated goal of $4,800 in annual income.

A huge part of this plan involves my dividend income reaching $400 monthly by the end of 2020. That is the secret sauce that will allow me to work less hours for an employer, should I choose to do so. To this point I have never touched money once it has gone into my investment accounts. I have only reinvested every penny earned. I will continue to maintain this discipline until such time as the beginning of 2021 when I can use it to finance my SFF.

As for the dividends, $400 per month amounts to $4,800 per year. The road to $400 in monthly dividends-earning-power should look something as appears in this table:

Five Year Plan Dividend Table

YearAgeAnnual (Div + Int)Monthly (Div + Int)% Increase YOY
Anticipated dividends through 2020.

Hard Work Pays Off

This plan is only possible because of the hard work I have already put in and the diligence I will maintain to bring it to fruition. Without the skillsets of persistence and patience, all of the investing acumen in the world would be wasted. When I started out learning about investing less than a decade ago I knew it was the right thing. I didn’t know exactly where it would lead, but I knew it was simply right.

The fact that I really didn’t know anyone personally who had charted the course before me only reinforced my resolve that this was a worthy and righteous endeavour. Remember: If you want to have the results of the 10%, you need to behave like them. By spending less than I have earned all the way along and investing the difference, I have been able to achieve steady and sizeable results all along the way. The tangible reality I am creating is a world where I will be able to choose when and how I spend my time. That is the greatest gift of all.

This is going to be the best, most productive five years of my life. In a world where so many people work overtime just to make ends meet and to keep themselves on the hamster wheel of consumerism, I will instead be working toward a vision that is so clear in my mind I can all but taste it. The thought of achieving SFF by Age 33 is highly motivating.


Semi-Financial Freedom is largely about mindset. A huge component of making this plan a reality involves deciding what I want out of life; do I want to work long hours to earn more money so I can afford material goods, or would I prefer to work intelligently and invest to afford not to need to work as much, thus being able to devote my time to creative pursuits?

The figures presented in the plan above would not work for many people. Some people desire a big annual vacation (or more) to satisfy their thirst for “something else” in life. Others want a new vehicle every few years when they get bored of the one they’re driving.

By living a simplified lifestyle (which is how I want and choose to live), I am able to keep my expenses low while building my income up to reach the point where I become master of my time. It is a wonderful feeling to finally reach this point where I may actually begin to reap the rewards of the disciplined life I have been leading.

I am excited for the challenges I will face over the next five years and the rewards I will garner by overcoming them.

Thank you for reading.


What do you think of my plan? What could I do to expedite this process?

Pictures courtesy of pixabay.com

2 thoughts on “Five Year Plan

  1. Allan says:

    Great job Ryan! I’m also considering semi FI… I’ll see. My plan evolves all the time.

    By 2020 my mortgage should be paid. I’ll be 39 and I should have at least 5000$ in dividend income… that’ll open me new doors for sure!

    Take care
    Allan recently posted…L’exode des villes ou le retour à la terre : un de mes rêves!My Profile

    1. Allan,

      I anticipate this to be a moving target as well. I’ve been meaning to “put it on paper” for some time now and this is the first real formulation of the entire plan. As the years roll on, I expect there will be changes. If anything, I believe my assumptions have been largely on the safe side. I have a lot of positive outcomes brewing and am looking to seeing how things unfold.

      We both seem to be targeting the same range (2020) to make a lot of things happen. At that time we’ll have to meet up and have a drink to discuss it!

      Take care,
      – Ryan

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