I’m so excited to bring you this next Slow FI interview with my friend Mel, who writes the blog Modest Millionaires.
I met Mel in 2018 soon after I started blogging. Over the last few years, we’ve become great friends! In 2019, she participated in the beta group for my lifestyle design program. During this program, I learned that she also wanted to start her own financial coaching business.
Over the last year, it’s been a lot of fun to see our businesses grow and evolve in tandem.
In the fall of 2020, I decided to quit my job to focus on my business. Around the same time, Mel decided to take a 1-year sabbatical. This sabbatical would allow her to test out her ideal post-FI lifestyle, which for her looks like working part-time on her passion-based business and having plenty of time with her family.
I absolutely love the idea of taking a sabbatical to test your ideal future vision.
Now, Mel is focused on generating enough income to cover her expenses while working part-time on her business. This would allow her to fully take the leap to Coast FI!
While she’ll be the first to tell you that this is an experiment, I very much doubt she’ll need to go back to work after this year is up. She’s already seeing a tremendous amount of success working for herself.
Let’s hear from Mel about her decision and how she made it possible to take a 1-year sabbatical from her 9-to-5.
1. Tell me a little bit about you.
Hi! My name is Mel, and I’m the blogger behind Modest Millionaires, where I document my and my partner’s journey towards financial independence. I grew up and currently live in the province of Quebec, and my blog is available both in French and English.
One of my most important roles is being a mom to our two young kids. I was actually pregnant with our oldest (who is now 6) when we hashed out a 10-year plan to reach financial independence by 2025. One thing that was super important for us to consider in our plan was to find ways to gain more free time to spend with our little ones while they are growing up.
After my studies in business administration, my 11-year career has mostly been as a public servant where I worked in various roles as a senior business analyst. Over the last few years, I’ve also started offering financial coaching as a side-hustle. I’m passionate about helping people take control of their finances. Having seen first-hand how having clarity around your finances can be life-changing, I absolutely love to support others on their own path.
2. What deliberate decision have you made to slow down and improve your life?
When we first crafted our 10-year plan towards FI, we had a clear idea that we wanted to use our freedom incrementally on our journey. We knew we wanted to spend as much time as possible with our kids. We, therefore, included plans to increase remote work and take some unpaid leaves once our kids would start school to spend summers off with them.
The first big decision we made to slow down and improve our lives was in 2018 when I negotiated a full-time remote position in my public service role. Because I no longer needed to commute and could avoid small talk around the office, I now get to walk my son to school every day, and we get to skip after-school care.
We also knew that we wanted to travel with our kids. In January 2020, we took a month off of work and went to Mexico as a family. We had a wonderful time with our kids, and we also made it a point to invite other family members to join us for a portion of the trip. Little did we know how important these memories would be in helping us through the tough months of lockdown because of the pandemic!
Finally, my most recent deliberate decision to slow down and improve my life has been to decide to take a full sabbatical year to test out Coast FI.
This means that I am planning to cover my share of our yearly expenses by running my business part-time. This will allow my investments to continue to grow, so I will still hit my FI number.
I made this most recent decision in order to find a better balance in my life. It’s no secret that pandemic life has been particularly tough for parents, especially for moms. I found myself exhausted juggling the uncertainty of our oldest’s school and other stressors. Everything coming up at once made my work a lot less enjoyable.
3. How has your decision to take a sabbatical leave impacted your quality of life?
While I’m only a couple of weeks into my sabbatical, I’ve already felt a huge relief from this decision. From the moment I handed in my notice, I’ve felt my mindset shift and the pressure from this past year slowly begin to release. I’m so relieved to know that I’ll be in charge of my entire schedule. I will have the flexibility needed for any potential school or daycare changes while things continue to be unstable with the pandemic.
I haven’t reached FI yet, and I want to continue doing some income-generating activities. Because we have reached Coast FI, this means that I only need to cover my share of the expenses. I will get to shift and focus my efforts on building my business and being my own boss.
I know this will improve my quality of life. I have my ideal schedule planned out with a part-time focus on my business. I’m excited that I get to work on the things I’m passionate about. This fills me up with such uplifting energy.
4. How does your decision to take a sabbatical leave impact your financial goals or timelines?
It’s very possible that this could slow down our path to FI, but it might not.
In 2014, we created our initial FI plan. In that plan, we estimated that we’d achieve full financial independence by 2025. We also predicted that we’d reach 80% of our FI goal by 2023.
Given the increase in the market over the past few years, we’ve already reached 80% of our FI goal in 2020. This was 2-3 years earlier than we expected. This greatly helped me to build my confidence to make this change to our plan.
Who knows? I could still hit FI at 37 in 2025 if my business grows more quickly than expected or the market returns are higher than expected.
Even if there is a big market drop, knowing that I will still be earning some income gives me confidence that we can deal with any impact that this decision will have on our timeline. This would allow me to live a semi-retired lifestyle. I could cover my full expenses with active income. Or, I could start to withdraw a small amount each year from retirement accounts (say 2%) to cover the expenses that my business doesn’t cover.
If I did this, I’d still reach FI by around age 45. I’m okay with this. The most important thing to me is to find the right balance I need.
My partner and I have an interesting financial approach where we view things both individually and combined. I like to know that I can cover my share of our expenses and that I will, at one point, reach my own individual FI goal regardless of our combined number.
This being said, my partner (Mr. Mod) currently enjoys his work and isn’t sure when he’ll make a move to quit his 9-to-5 job. He could continue working until our initial target of 2025 even if he reaches his own FI goal sooner. If he did this, on a combined basis, we may surpass our FI target sooner.
My ideal life includes some income-generating activities, so I’m happy to start taking a slower approach. At this point, he doesn’t think he’ll want to generate income, so he’s focused on hitting his full FI number. However, I am excited to see that my transition to Coast FI has influenced him to start his own reflections on what he wants and if he wants to leave his 40-hours-per-week schedule earlier than planned.
5. What enabled you to take a sabbatical leave?
There are a number of things that have helped me to make this decision. Here are just a few:
- My spouse is continuing to work which allows me to have more runway to build up my business.
- We live in Canada, so we aren’t subject to the same health insurance woes as in the United States.
- Knowing we already surpassed our projections in our 10-year plan helped me to build up confidence.
- My parents and my partner’s parents are financially secure. This allows us to know that none of them will need us to financially support them.
- I’ve made a lot of mindset shifts over the past couple of years. I’ll share more about those below.
One important mindset shift was realizing that my ideal schedule would still include about 20 hours/week to work on passion projects while my kids were still in school. I realized this through exercises in the book Work Optional as well as from my participation in Jess’ initial Design a Life You Love program.
My dad was an entrepreneur, so I was no stranger to entrepreneurship. I grew up seeing my dad work in a way that was flexible and allowed him to be present for us as we grew up. I feel like I learned a lot from his experience. I also started running my own side-hustles and have gained confidence in my ability to generate income.
Finally, being part of the FI community has helped me understand that there are so many different ways to approach the journey to financial independence. By interacting with people online and in-person, I got to see real-life examples of people who had made shifts to part-time work, entrepreneurship, and early retirement. I’ve been so inspired by these relationships and now realize that these types of plans really do work!
6. Were there things in your life you adapted so you could continue to work toward your goals?
One particular thing I have done in the last couple of years has been to build up my support network in preparation for my transition. I started working with Jillian Johnsrud to plan what this transition would look like. I have weekly meetings with my accountability partner. I’ve stayed consistent in showing up within the personal finance community locally and online.
Thanks to this support, I was very deliberate in how I allocated my time and focused on my business prior to taking the sabbatical. This community helped me work through various contingency plans. They also helped me build my confidence that taking this sabbatical to test out Coast FI would not hinder my long-term financial goals.
7. Why and when do you think someone might consider “downshifting?”
Back in 2018, one of our parents had been diagnosed with cancer. It’s currently in remission, but it is an incurable form of cancer that we know will eventually return at some point in the future. This unfortunate experience has been crucial in my understanding that it’s important to make the most of the journey. Life is short, and there is no guarantee that the people we love will be with us when we reach FI.
It’s normal that some parts of the financial independence journey are somewhat boring. Yet, if you find yourself dreading every workday and feeling completely depleted, it might be time to consider downshifting. If you find that you want to escape your current reality and you feel obsessed with reaching FI, it might be time to consider if there are ways to use the incremental freedom you’ve already acquired on your journey.
8. How did your pursuit of FI help or hinder your decision to take a sabbatical leave?
My pursuit of FI is the reason I could make these decisions. It provided both financial security and inspiration from knowing what others on similar paths had done.
Knowing that others who were nearing their FIRE dates were being offered perks like full-time remote work to keep them on board gave me the confidence to make this request of my own employer.
I needed to do a lot of emotional work to feel ready to take the final leap to try out Coast FI. With the right type of support from friends in the FI community, I was able to create a plan that made sense and fit with my level of risk tolerance. If it wasn’t for my pursuit of FI, I’m not sure I would have been able to surround myself with the right kind of support.
9. What advice do you have for someone considering a similar decision?
Downshifting is a huge decision and it’s important to be mindful of your financial needs and who depends on you.
The first step is to gain clarity on your financial situation is. How much money do you spend in a year? How much money will you need to sustain your current lifestyle? Are there changes you could make to your spending to allow you to stretch your savings further in order to make a long-term shift?
As you work on your financial roadmap, it’s also important to reflect on what your ideal lifestyle looks like. You want to make sure that the downshifting options you’ve identified for yourself help get you closer to that ideal lifestyle and not farther from it.
There are so many options on how to approach downshifting. You could drop to part-time or reduced hours, negotiate a permanent work from home arrangement, take a sabbatical or completely change the field in which you work.
Focus on what you are looking to obtain and not on what you are trying to escape. The clearer you have planned out what you are looking to obtain, the more you will be open to notice and seize opportunities when they show up.
Keep taking incremental action to test out your hypotheses. You don’t need to make huge changes right away; you can find ways to test your ideas on a smaller scale. This was what we had in mind when taking a full month off from work and again when I started offering more financial coaching even though I was still working at my 9 to 5. I wanted to see what it felt like to actually be doing more of this work and if I still enjoyed it at that level.
Finally, as mentioned previously, the community you surround yourself with and your support system matter so much! Learn from others who have done the change you have in mind. Find out what helped them, what they would have done differently, and reflect on how this would apply to your own goals.
Thank you so much, Mel, for sharing your story with us!
There is one main thing I want to focus on as I reflect on this interview – the idea that it’s okay (and even good) to reduce your risk.
Sometimes, people make it seem like you need to completely burn a bridge in order to make a shift in your life. I absolutely do not believe this is necessary, and, in many cases, it’s not desirable.
I love the idea that you can test something out, see how it feels and if it will work, and then figure out how you want to move forward long-term.
This approach allows you to learn by taking action. It also allows you to change your mind or adjust course if you realize that the path you are going down isn’t exactly right.
The best part about a sabbatical or a mini-retirement is that it can be a “full-time” test-run for your future plans.
Some people start to incorporate aspects of their ideal life while they are working full-time. Others, like myself, reduce their work hours to incorporate these things.
One great thing about taking a sabbatical, if you can, is that it can give you the time and energy to develop your plans and achieve success without burning yourself out.
I can’t wait to see what Mel does with this year ahead. I’m confident that she won’t need to return to full-time work, but I can imagine it’s very nice to have the option.
If you’d like to follow Mel’s journey, you can find her in the following places:
- Blog http://www.modestmillionaires.com/en/
- Twitter https://twitter.com/ModMillionaires
- Instagram https://www.instagram.com/modestmillionaires/
- For inquiries about financial coaching: http://www.modestmillionaires.com/en/coaching/
Awesome interview!! Love all the insights you provided, Mel. I completely agree that reducing risk is a great path forward. Keep up the great work!