Eliminating Legacy

Legacy

  1. denoting software or hardware that has been superseded but is difficult to replace because of its wide use.
  2. an amount of money or property left to someone in a will.

Today the universe aligned, and both definitions of legacy entered my life. Normally, they would have passed me by but because I was listening to the Aussie Firebug podcast with the Mad Fientist thinking about FI, I had two realizations.

The first realization was code related. I was building an interpreter to compile a legacy templating language into JavaScript and was failing horribly. I was thinking to myself:

” Why the hell are we supporting this? This is literally 15 versions and 3 years behind, the language itself is super outdated, and our new build system doesn’t support it…wait, wait a minute. The new application will be using React so we can convert these to JavaScript once and wait until they are rebuilt in the new format. Problem solved, the better way.”

When it comes to being minimalist, optimizing your finances, and working towards financial independence; eliminate your legacy baggage. Sell off equipment for old hobbies, sell or give away unused furniture, and collapse investment funds into better funds. Myself, I’m migrating my HISA to EQ Bank to get a better return on my emergency fund. It will lower my TFSA limit for the year, but it will bounce back next year. Additionally, I’ll be getting a new credit card to get better rewards return on my spending. I eliminated legacy to move closer to my goal.

Finally, for the other meaning of legacy, why does someone leave a legacy? The only legacy I’m concerned with leaving is a positive impact on the world. Maybe I’m simple like that, but I think leaving things better than when you started is one of the most valuable things you can do in your life. Don’t get me wrong, if I have children and have money left over, I won’t be upset about it. If I hedge and invest well, and work hard, I don’t mind if I’m net $0 when the end comes. Financial Independence is an asset that provides freedom.

-Mike

Inflation: What is it exactly?

Inflation: a general increase in prices and fall in the purchasing value of money.

Oh, so THAT’S what inflation is? Thanks for clearing that up, Mike. We can all go home now.

Sarcasm aside, the definition certainly doesn’t clearly explain what effect is has on your money. When the cost of goods and services becomes inflated, it means money you have already earned becomes less valuable. Inflation is one of the main reasons you NEED to invest your money. Nobody likes throwing away money, why let inflation eat away at your hard earned cash?

Canada has enjoyed relatively low rates of inflation over the past 5-year period (about 1.24% to 1.61%). In the 1989, however, that number was 5.26%. Let’s break it down:

  • A $1 candy bar in 1989, would be $1.05 in 1990
  • A $10 pack of beer in 1989, would be $10.50 in 1990
  • A $100 grocery bill in 1989, would be $105 in 1990

I like to imagine inflation as the following: I walk to the grocery store, buy my groceries for the month (Yes, I only spend $100/mo for groceries), and on the way out I toss a $5 bill in the garbage. Nobody in their right mind would do this voluntarily, so, why would you let this happen to your money when it’s sitting in a bank account somewhere?

Mike, How can I stop throwing away money? Get a no-fee bank account, open a high-interest savings account (HISA) or even better, a tax fee savings account (TFSA) and put your money in there and your money will immediately start working for you. Tangerine, EQ Bank, and PC Financial are all good choices.

I’m with Tangerine and I have zero complaints after moving from a full service bank. If you decide to go with Tangerine, use my Orange Key (43631608S1) on sign-up to buy me a beer. Thanks!

– Mike