ESI Scale Interview 45

Today we continue the ESI Scale Interview series where people answer questions about their success at working the ESI Scale.

In short, the series focuses on what the interviewee is doing in the areas of earning, saving, and investing. They also get an opportunity to ask ESI Money readers for suggestions if they choose to do so.

If you’d like to be considered for an interview, drop me a note and we can chat about specifics.

With that said, let’s get started.

Today we talk to the blogger from That Charles Life.

My questions are in bold italics and his responses follow in black.

OVERVIEW

Please tell us a bit about yourself.

I’m in my late twenties and I currently live in Shenzhen, China.

But I’m originally from the cold, flat prairies of Canada.

No wife or children, and none on the horizon for the foreseeable future.

Hobbies include being a personal finance nerd, finding the best artisan burgers in my Chinese city – quite a few! And trying to make sense of the Mandarin language.

I also enjoy traveling as much as possible, staying healthy and active. All between pursuing financial freedom furiously.

What is your current net worth?

I’m currently worth about $70,000 at the time of writing.

Yeah, not much to brag about in the world of personal finance and FIRE, but stay tuned for the scale section!

  • Investments (Stocks, bonds, ETFS): $60,000
  • Cryptocurrency*: $5,000
  • Cash**: $5,000

*I hum and haw about including cryptocurrency in my net worth as it was a very speculative purchase. And since it’s so volatile it’s hard to assume any particular number in my current net worth, but this is what it’s been hovering at for the last month or so.

**I don’t normally keep nearly this much cash on hand, and it will be transferred to my investments shortly.

I usually keep about $1,500 in cash at any time. I keep about $1,000 in my Chinese bank account and $500 in my Canadian account to cover a car loan I have back in Canada.

The car’s resale value and loan amount are pretty equal at this point so I’m leaving it out. Yes, I pay a loan on a car I don’t use. Yes, I need to sell it ASAP.

How did you accumulate your net worth?

My current net worth is nothing to write home about, but considering I’ve never made more than $40,000 in a year before this year, I’m quite happy with where I’m at.

Most of it is from diligent saving and investing.

Of course there were a few lucky stock picks early on when I first started investing, and I inherited a few thousand one year.

My investment strategy is saving as much money as possible, and investing in low cost, total market ETFs.

I allot a small percentage of my portfolio towards risk-it-for-the-biscuit investments like crypto and weed stocks. I tell myself it’s because I am young and can handle the risk, but it’s also just so thrilling!

EARN

Tell us a bit about your career.

I’ve got a bachelor’s’ degree in business from a community type university in my hometown.

The only job it’s ever paid dividends on is my current position of teaching ESL in China.

Previous to this, I worked various sales jobs for some larger named international and national companies, but never sparkled too brightly in those roles.

Like I mentioned, I’ve never made more than $40,000 per year before getting into ESL.

In 2016 I dropped everything, sold some stuff and moved to South Korea to teach English.

That’s where I kick started my savings and investing. I was able to save $20,000 in the year. Effectively doubling my net worth.

Now I’m over in China, working obsessive amounts and aiming to save 2-3x that per year.

I work 7 days a week and usually about 70 hours a week. But I have a lot of free office hours during the day to work on side projects, hit the gym, and keep my sanity.

Plus I enjoy my weekend evenings all the same.

My current net savings target is $40-$50,000 per year. This is also including budgeting for about 2 months of travel each year. So I don’t mind the grind.

Do you have a side hustle?

You could call it a side hustle or a second job, but yes.

I teach ESL online on top of teaching at a public school in China.

I make equal to or more than my monthly salary each month teaching online in the evenings and weekends.

If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?

Until I started teaching English, I would give myself maybe a 4 – though that’s probably a little lenient.

I graduated without debt and was at least smart enough to start investing. But my annual salaries, sales results and saving rates were absolutely pitiful in hindsight.

I’m confident my results sit at a 7 or 8 now.

I am able to save after taxes and expense’s the equivalent of the starting salary of many professionals back in Canada, all from teaching ESL.

At this rate I can reach Financial Independence and retire early within 12 years. Sooner if I get a higher paying job which is completely possible out here.

What are your future plans regarding growing your income?

If I can sustain this level of working and earning, I can reach my financial independence number within 12 years.

I should be able to retire by the time I’m 40. So like clockwork I will continue to grind, save and invest.

I will also keep my eye out to higher paying jobs to increase my salary.

Further, I have my fingers crossed that some of my side projects such as blogging, ecommerce or ESL recruiting can start taking off, and increase my income as well.

SAVE

What percent of your gross income do you save?

I think I save about 75-80% of my monthly income.

I am able to do this by being very diligent with my spending. But largely due to the fact the cost of living in China is quite cheap, and working as an ESL teacher, my housing is provided and paid for.

I don’t really have a budget, but the way I spend money is so systematic now that I know when I should and should not spend money.

I have a rough idea of what my monthly expenses are and how much I can spend for each kind of cost category; food, entertainment, bills, travel, clothing, etc.

How did you get to this level?

I was raised by frugal-ish parents who would only spend money after carefully thinking purchases through. Well, one parent was smart with money at least, the other was a little more consumerist – Mom if you’re reading this…Sorry.

Then living as a broke university student definitely instilled the frugal and considerate spending habits.

After learning about minimalism, personal finance and financial freedom I really stopped caring about buying material things and focused on improving my savings rate.

Also since I had a low income when I first got into personal finance, optimizing my spending and saving was crucial.

Now that I have some more disposable income via an increased salary and a second job, I need to actively focus on spending a bit more to enjoy life.

If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?

Saving 80% of my income, I want to say 8/10 but I think that level deserves a higher rating than that even. Maybe a 9?

What are your future plans regarding saving your money?

I plan to stick to my routine of working hard and saving diligently.

I’ve got a good system down that I know will deliver the results I want.

As my goose egg increases in size I will also start doing much more research into tax optimization.

INVEST

What are your main investments?

Almost everything is in the stock market.

I keep playing with the idea of diversifying into investment properties down the road once my portfolio is on track, but for the returns and stress of having renters across the world, not sure it’s worth my time or money.

My portfolio looks like this:

  • 30% US market ETF
  • 20% Canadian market ETF
  • 17.5% Emerging markets ETF
  • 17.5% international markets ETF
  • 15% crypto and individual stocks – mostly marijuana

I have tiny percentage in bonds, but decided not to worry about those until I’m a little older and closer to the halfway point to my retirement phase.

I would love to hear from readers what they think about that distribution and investment plan.

Return wise; weed stocks have been insane, but they are crazy volatile like crypto. I had some huge gains last year with crypto but I’m pretty deep in the red now.

The rest of my actual stock portfolio that holds the majority of my net worth has been doing quite well. Consistent gains.

I’m not quite sure what my average rate of return is, but it’s definitely in the green.

I remember from my initial research, the average long term return on my all ETF’s are a collective 6-7% so I’m not too worried about what my actual return rate is currently. The market is going to do what the market does.

What are your future plans regarding investing?

I will probably continue with this plan, make tweaks and learn more about rebalancing as I go.

I am continually buying, so I buy a little more of what’s cheaper at that moment, but purchase in all 4 ETFs each month. That’s about as much rebalancing as I currently do.

When I get older I will start moving some of those stocks into bonds and begin purchasing more bonds. I will also try to make less speculative purchases, or at least keep them to a minimum.

I’ve done really good with my marijuana buys so far, but that could go south soon now that Canada has legalized and these companies are going to be required to deliver on the high evaluations they’ve earned for themselves. So in the immediate future I will probably start harvesting some of those profits.

WRAP-UP

What money mistakes have you made that others can learn from?

I financed a new car, that wasn’t a great purchase as cars aren’t assets. Especially since I don’t even use it. So that was stupid.

I’ve also purchased some individual stocks that lost completely. Thankfully that was near the beginning of my investing career so I didn’t lose too much.

Other than the marijuana plays, I don’t buy individual stocks anymore.

A big mistake, I was greedy with crypto and didn’t realize any profits at the height of the industry back in late 2017.

I could have many multiples more than my current worth of crypto had I cashed in some profits. Live and learn.

Are there any questions you have for ESI Money readers regarding any parts of your finances?

1. I would love to know what people think about grinding 7 days a week, non-stop to reach financial freedom within a decade. Am I not enjoying life enough? Was I smart to move a world away from family and friends to pursue financial freedom?

2. What do you think of my investment strategy and distributions? Assuming I’ll be retiring or semi retiring in 15 years but investing for another 60-70 years.

3. I’m a self-acclaimed lifelong learner so I’m always open to suggestions on what I am doing now, overall.

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