The Modest Millionaires 2025 Plan

Our 2025 plan is a 10 year plan in order to achieve our financial independence. There are two important parts to this plan:

  • Maintain low and predictable spending.
  • Increase our investments in order to achieve a total invested amount allowing us to cover our expenses with a 4% withdrawal rate.

To view a short summary of our progress in terms of investments and spending compared to our goals, click here.


We have rigorously tracked our spending in order to determine the level of expenses we would like to maintain. Obviously, we try to spend as little as we can but we realize that it is essential for us to have a precise idea of how much we spend in order to plan to have sufficient savings to cover our expenses.

According to our historic spending as well as our future projects, we initially planned to spend an average of $45 000(CAD) annually (or US$34,870)

The first five years of following this plan, our spending has been closer to an average of $52,000 (CAD) annually.

The investments

We have decided to use the 4% safe withdrawal rate in order to determine how much our total investments need to be worth in order to have a growth allowing us to cover our cost of living for the rest of our lives.

This rule originates from an article informally entitled the Trinity Study, that was published in 1998 in the American Association of Individual Investors Journal by three finance professors at the Trinity University. The authors of the study used different composition of a retirement portfolio and different withdrawal rates, based on market data of 1925 to 1995, in order to determine the probability that assets remain in the portfolio after 30 years, despite a constant withdrawal rate over that period whether the market does well or poorly. In brief, the 4% rule comes from one of the scenarios that showed there was very little risk of running out of investments from a portfolio composed of stocks and bonds.

Lots of people have used the parameters of the Trinity study in order to examine the 4% safe withdrawal rate and I hope to write a more detailed article on this subject in the future. In short, we have chosen this rule for our 2025 plan in order to determine the total investments we would need to have to consider ourselves financially independent.

We do not include the value of our house in our investment assets because we plan to have it paid off completely before quitting our jobs and plan to continue living in it when we retire. Therefore, the cost of our mortgage is also not included in our spending.

Update February 2017:

We have decided to take some money out of our TFSAs in order to fully pay off our remaining mortgage! Click here to find out how we accomplished paying off a mortgage of a little over $150 000 in 4 years

Update May 2020:

While we used to show our targeted financial independence number (FI#) on here, in May 2020 we decided to modify how we present it and we now only share our progress in terms of % of our FI# reached.  

You can find all our progress updates here

2 thoughts on “The Modest Millionaires 2025 Plan

  1. Great Post! I have a question about paying the mortgage down. Can you pls clarify if you paid off your condo mortgage or your house mortgage? Also, were you paying down your mortgage every year and still saving per year? Or were you only paying down the mortgage that year, and not investing much (or anything) into savings/investments? Are your savings all the discretionary money that you had available to pay down debt or invest? Thanks!!

    1. Thanks Dale! We paid off our house mortgage, our rental still has a mortgage. This post is a bit high-level in terms of details. We aim for an average what we would be putting into our pensions and investment accounts. It is definitely not linear as in our overall plan. Looking back some years we invested less (especially the year we took out of our investments to pay off our mortgage) and other years, like this year is looking up, we should invest more.

      We were also paying down the mortgage with additional payments in 2013 to 2017.

      I hope this clarifies the timeline a bit! Thanks for stopping by :).

Leave a Reply

Your email address will not be published. Required fields are marked *