Interview with Settling Nomads: Master Of Many Income Streams
Streams of cash are a good thing!
Today we are doing an interview to get to know the team behind Settling Nomads who have been busy working a 9-5, investing, and raising a family, all with the goal or Financial Independence.
If you haven’t done so already check the website over at settlingnomad.com or their twitter profile @SettlingNomads
Now the introductions are done let’s kick off the interview!
Blind Luck Project (BLP): Hey Settling Nomad, I’ve enjoyed getting to know you over on Twitter where we talk all things dividend investing, and other alternative income streams.
Lets start with a quick intro from you, who are you and what are you all about?
Settling Nomad (SN): Hello BLP, I am a first generation immigrant to Canada and have a wife & two daughters. We are originally from India and both me & wife are Computer Science graduates and were actually in the same class!
BLP: I see your 2025 goal of $30K per year of dividends which is super impressive, what is your ultimate cashflow goal from your portfolio? Do you have a net worth goal as well?
SN: I set this $30K annual dividend goal by 2025 back in 2020 during pandemic. But after 2 years I feel it is quite aspirational. By end of 2022 we will be able to achieve just about $8,700.
In last 2 years, we diverted significant amount towards a second house purchase, another investment property with a friend, a restaurant & a grocery store investment. Hence, dividend investing took a back seat and requires rebalancing the goals.
From net worth perspective, we are sitting around $2M as of now but don’t track it actively or have any goal tied to it. Based on some encouragement recently, I started tracking our goal semi-annually but not too keen on it since I don’t have any specific net worth goal in mind.
Eventually I would love to see about $60K-$80K coming in from different sources (Dividend, Rent, Profit from restaurant & grocery store). And once mortgage is paid off as well, I will think of retiring. Currently I am 42 and wishing to retire by 50.
BLP: Retirement by 50 is an excellent goal! What are you trying to accomplish with your website SettlingNomad.com?
SN: The 2020 pandemic hit us really bad mentally, staying at home all the time and working was very hard with kids. I was working from home 1-2 days weekly prior before the pandemic as well but this whole idea of working from home full time was quite stressful. I started looking at some stressbuster outside office/home/work and got this idea of blogging. I come from IT background so an hour later I was all set with the website! I was tracking my financials earlier so it was not hard to put together a basic framework and what message I wanted to convey.
So short answer is, settlingnomad.com was born out of boredom but quick enough I realized, it could motivate readers as well to start their own financial independence journey. Soon I started connecting with many readers with whom I am still in touch. 2022 was very exhausting personally for many reasons so I haven’t touched the site. I look forward to resume in 2023 with my monthly updates.
BLP: So you’re still working a 9-5 job while your wife has left the rat race and does some freelancing, what is your 9-5? And what lead to the decision to have her quit hers?
SN: Yes. I work 9-5 for a big Canadian bank in their IT’s testing department. I have a Computer Science Masters degree and all my professional life have worked only in this one field. My wife and I studied together for our Masters and hence she also worked for few years in IT back when we were in USA. We were fortunate to be blessed with a baby girl in 2010 and it was our joint decision that she left her full-time job to take care of our child. Financially we were fine with just one income but after some time she got bored at home and registered herself with utest.com as a part time tester. She continued pursuing this part time work and eventually picked up more senior role and now she earns quite well in this part-time gig!
BLP: that’s pretty cool! I’ve never heard of UTest.com but it looks pretty legit, I’m going to look into it a bit closer, I know there is always a high demand for software testers.
BLP: You immigrated to Canada 8 years ago, what was the process like and has that played into your goals to become financially independent at a young age?
SN: Before settling down in Canada, we lived in 3 other foreign countries for work. When we decided to make Canada our future home, the immigration process was quite lengthy and painful. It took us like 3 years before we were invited to join the 30M Canadians visa category. The most challenging part of us moving to different cities across the world and every place we went, we had to provide police clearance certificate to be attached to our immigration file. We finally got the green light when we were in London and travelled immediately to Toronto to complete the formality. After that we went back to India and I started looking for job opportunity in Toronto, which fortunately didn’t take long and finally we moved here for good in Sept’ 13. I strongly believe traveling the world teaches you to adapt to any situation life throws at you and hence our past experience helped us settle well here.
Typically an immigrant gets to the thought of FIRE relatively late as they have other priorities in life. Moving, settling down, stability comes first and hence financial freedom takes a back seat, often till we are in late 30s. Same happened to me and I actively started pursuing FIRE only until 5-6 years ago when we were stable in life in terms of house, kids etc.
BLP: You have 2 young daughters (awesome!) I’ve heard people criticize the FI/RE movement claiming it’s a bunch of DINKs (Duel Income No Kids) and that retiring early can’t be done if you have kids. Clearly your plan suggests otherwise. What would you say to the sceptics?
SN: I come from India where not having kids is seen as a taboo. You are “expected” to get married by certain age and thereafter have kids by certain age. I never imagined a life without kids as we are not tuned to think life that way. :)
Of course kids are expensive and hence achieving FIRE often could take much longer. But personally for me, I never regretted having kids from financial perspective. There are other challenges with having kids, they can increase your blood pressure but that’s a separate discussion. I feel if you are earning 6 figures, saving rate is high (25%-50%) and are disciplined with investing, nothing is impossible. Yes it may take little longer but then life is all about making trades and sacrifices. In the end, with or without kids, one needs discipline and consistency to accumulate wealth.
BLP: What would you do differently if you were to start all over again?
SN: I would start at least 10 years earlier when I was in my mid-20s. In fact I believe everybody should get serious by then to be in a great position by the time they are 40. Ideally one should invest from their first paycheck but cutting some slack, I give them few years to have fun and then get to the senses and go for it.
BLP: What would you say to people who say new investors should hold off because we are headed into another deep recession similar to 2008?
SN: I am no stock market expert and beside the few key financial metrics, I don’t even understand much. But one thing I understand is I am incapable of timing the market. I would rather buy bit by bit to do dollar cost averaging then simply sit and wait outside without investing at all. One can get lucky with the timing but personally I don’t think generational wealth is created by timing the market. I am also a strong proponent of dividend investing, which is safer as compared to picking “growth” stocks which may or may not boom. I would rather earn dividends then wait for some speculative stock to soar.
BLP: This is some really good advice right here. I agree that the system is far more important to creating generational wealth than trying to get lucky and pick a few winners. Slow and steady wins the race.
BLP: i know you own a rental and also rent the legal basement unit of your primary home out. How has it been being a landlord? Have you had any issues or has it been pretty easy for you guys? What are your income goals for rental property income?
SN: Yes we have legal basement units in two of our properties and this have more to do with having peace of mind and following the local jurisdiction than anything else. When we build a legal unit, the city and contractor ensure it is been built taking safety in consideration. We operate in Greater Toronto Area (GTA) where average home costs $1M and affordability is a real issue and hence having a tenant always help paying the bills.
In 2021, one of our main floor tenants stopped paying rent citing COVID related lay-off. It was a stressful time since in Ontario, it is extremely difficult to evict a tenant even when they are not paying. I had to file a case with landlord and tenant board and took almost 6 months to get a formal eviction. I was fortunate that they left immediately after the verdict but if they would have chosen to continue staying, we would have to pay some more amount to evict them. This would have triggered the whole process again. There are hundreds if not thousands of such cases where landlord is stuck with such tenants. In my 9 years of having investment property, this was the only situation with bad experience and it could happen to anybody. With the whole experience, I would like the local rules to be more balanced so neither the landlord nor the tenant have to wait this long unfairly. But this one experience is not a dampener, we have many tenants with mutual respect and sense of responsibility.
Depending on month and expenses, we are cash-flowing between $500-$1,500 monthly on 2 properties and by 2025 I would like to consistently average $2,000 from rental income.
BLP: Those are pretty good cashflow numbers! One bad tenant in 9 years is pretty good. I always cation people who have overly optimistic projections for rentals. I think it can be a good income source but you need to be realistic about the work/ risks involved.
BLP: You’ve played around with P2P lending (Peer to Peer), how does that compare to other investments such as your rental properties? Would you recommend it to others?
SN: Sure you can include this link: https://settlingnomad.com/lending-income/
I got interested in peer-to-peer lending after being introduced by one of my subscribers. I have been using lendingloop.ca which is a leading player in P2P space here in Canada and quite safe. I spread across my relatively small investment across various lenders to minimize the risk and I was consistently getting 10% ROI on my miniscule investment. Post pandemic, the lending requests have dried up significantly and hence I haven’t added any additional funds to increase the investment. At present, I am just recycling the interests earned for any new lending request.
This investment was experimental and I had good experience overall considering the flexibility the platform offers in choosing the lender, risk appetite, small investment amount etc. I would surely recommend this to others because the risk is quite low and one have control over who you lend to and what amount.
I have also done real estate linked lending in the past for bigger amounts and will do it again if I have surplus fund. I would recommend this to readers but only if they know the borrower well and of course with all due diligence and required paperwork in place.
BLP: Crypto has had a rough year, do you have any regrets with Crypto? What lessons would you say people should take from the implosion of crypto exchanges like FTX, BlockFI, Celsius, Gemini, etc.
SN: Crypto market was surely a disappointment but then there is always a high risk/reward with emerging market and I was aware of the same. As with any investment, one should only invest in relatively newer thing that they are comfortable losing. My original goal with crypto investing was 5% but honestly with the way this whole space is shaping up, this has taken a backseat. I will re-evaluate it in the future and resume based on my confidence and comfort level.
I learned not to get carried away with newer tech and it is okay to miss out on opportunity. I took decisions based on FOMO without doing my own due diligence, which was wrong. One thing I did good was sticking to major cryptos only (Bitcoin & Ethereum) but I still have funds stuck with Celsius, which is still quite new. My recommendation to readers: Don’t rush into any bright and shiny, it is okay to miss on few opportunities, take your own time to dive into & don’t invest more than you are comfortable to lose.
BLP: Just when I thought you had every income source covered I find out you are part owners of an Indian restaurant and a grocery store! How are those projects coming along? What advice do you have for people looking to start a similar business?
SN: I always wanted to have multiple stream of incomes and when a good friend of mine approached for restaurant business investment back in 2020, I jumped without much thought. It was a $100K investment for 20% share for a silent partnership and I was comfortable with the funds, idea & had confidence in other partners. I joined mid-way when franchise was already chosen, location finalized, design/plan approved & contractor was on-board with a building plan in place. It took a while for construction to wrap up and all approvals in place and we learned it is quite a time consuming process to start a restaurant from scratch, a much quicker approach would have been to buy an existing kitchen and modify as per our need. The city approval process including health, safety, fire etc is quite exhaustive and hence takes time. After much wait, the restaurant started in Sept’21 and as expected with any new business that the first 4-5 months was slow and we bled money. However, the business slowly picked up and now it is self-sustained. From the monthly financial review, the upcoming second anniversary in Sept’23, we should see profits coming our way.
When the restaurant was coming along, same partners also decided to kick-start another much bigger project – Indian Grocery with food takeout and fresh meat butchery. It was an ambitious project of much bigger scale but we were confident to pull it off (our biggest mistake!). We worked on the budget, sales forecasting, finalized the city/location along with other formalities. Due to uniqueness around the project, we had to again start from the ground up (regardless of bad experience with restaurant already with this approach) and it took about a year for the store to open in Jun’22. We were good with initial capital needed but grossly underestimated the operational cost on monthly basis and at present this business is bleeding about $50K a month. We are also not achieving the sales forecast and it is one of the major concerns/doubt we have currently. We are tweaking staff allocation, process, wholesalers etc to bring in efficiency and cutting costs. We also under-estimated the work this mammoth of a project would require, at least in the beginning stage. Needless to say, we are spending sleepless nights and are doing our best to arrange additional funds to stay afloat.
If I have an opportunity to go back by 2 years and change decisions, I would most certainly revert the grocery store idea for the time being. Don’t get me wrong, I am all supportive of this business but the timing wasn’t right and we took a much bigger bite than we could chew. One of the major setback was losing my friend (who brought me onboard) in a car accident just 2 days before the store opening. It was the worst few months of my life when we were grieving and at the same time had no choice but operating the business. Normally when you plan to get in partnership with people, you plan lot of things but not the thought of losing a partner! He was one of our working partners and quite resourceful with finances, not having him is hard.
To readers wanting to own their own business, I would say, take your time and do your utmost due diligence as one misstep could change your lives. We took some hasty decisions and clubbed with unforeseen situations, we brought all of us into unwanted financial mess. Starting a business is more than just arranging funds, it requires a lot of dedication and comes with responsibility for people who work for you. We didn’t realize earlier with any decision we take that we are going to impact not just 30 people whom we employ, but also their families. Don’t partner with people just because you know them, partner with people who comes with expertise and are financially strong and resourceful.
BLP: WOW!! Thank you for sharing all of that! I’m sorry to hear about your friend/ partner and I agree that’s a lot to process all at once when trying to grieve and carry on. Your observation about impacting 30+ families is also a good one, many people forget that peoples lives are affected by the success of a business and not just someone’s bank account. I wish you and the team all the luck moving forward!
BLP: I often share some of my personal failures with people to encourage others, and show setbacks are normal, and just part of the process. What’s the biggest financial setback/ missed opportunity you’ve experienced?
SN: The ongoing grocery store month-over-month financial loss we are incurring is the worst financial setback I have seen in my life. Apart from financial losses, we went through plenty of hard-work, planning and dedicated a lot of personal time on this project and a failure would be extremely disheartening and frustration. Setbacks teaches you many lessons and we are learning ours! Having said that, we have not lost hope and doing everything we can to keep going and turn the business to net-zero into profits.
BLP: What is the biggest mistake you see new investors making right now?
SN: I come from management background so planning & execution comes naturally to me. I am not saying you will never go wrong if you plan but it definitely increases the success probability. I strongly believe in putting together your goal, action plan and staying the course regardless of market situation and how few investors follow these basic principles. They get shaken & discouraged by short term market reactions and miss out on the long term overall picture. Many give-up in the bear market, not realizing it is an opportunity but not a curse. My two cents, plan & execute without worrying about daily news & changes. Discipline and an eye on the goal will make you succeed.
BLP: What would you tell people who say they don’t have enough money to get started investing?
SN: Most don’t see problem with Investing from early earning age but I totally understand not everyone are made alike or earn a decent enough wage to jump into investing from day one. If you really want to see better days, investing is mandatory and the sooner you start, the better. If people don’t find enough money then they need to work on a budget and see where can they cut back even few dollars. These add up and if they can find $20-$50 per pay-check to set aside and invest, it is a win. It is not about the $ figure, it is more about the habit that makes people win in life. We live in a world where even buying a fraction of a stock worth $1 is FREE and hence there is no excuse. And when you start seeing this $1 growing into $10 and $100 and $1000, it boosts motivation and next time you will be tuned to find more money to save and invest. As I said, it is not the money problem but mindset problem, all one need is to find few dollars here and there to save. One less coffee, one less take-out food, one less subscription is all you need to kickstart an investing habit.
BLP: What books have inspired you that you’d recommend?
SN: I have short attention span and hence reading (.. more so finishing) a book doesn’t come naturally to me. That’s why I don’t read too many books but I loved (.. and finished) Rich Dad Poor Dad by Robert Kiyosaki as it teaches you about changing the mindset and doesn’t give you a formula to success. In my opinion, every teen should read this book couple of times and understand the fundamentals.
BLP: What are some of your hobbies when you are not busy investing, raising kids, working your 9-5, etc?
SN: Raising 2 daughters is harder than one can think of but I try my best to spend as much time with them as I can. I also love binge watching movies/series and going on long drives. I also love working with spreadsheets especially stock/dividend updates.
BLP: What did you want to do for a living when you were a kid?
SN: Back in India, every parent want their kid to be a doctor or an engineer and hence those were my original choices. Now when I think about it, I would have been a terrible doctor but a good engineer, which I never pursued. I went on to become a computer science grad and loved the job initially.
BLP: I always figured engineer types would make good computer science types :) Do you have any other businesses or investments you’re looking to get started in or are you going to focus on growing the many projects you’ve already taken on? You already sound very busy!!
SN: Not at the moment as you know I have my hands full and would like to focus on getting the current initiatives profitable and stable. I do have some interest in Indian style bar & grill, which we may explore when we have the bandwidth and fund. In parallel, I would love to have a $2M portfolio churning out $60K-$80K annual dividends to take care of our monthly expenses.
BLP: How do you stay so driven? A lot of people have dreams but I find you need a strong “why factor” that translates into action toward your goals.
SN: The single most inspiration for me to build a sustainable wealth portfolio is: My kids come first and they are not facing the hardship I went through. As any immigrant will vow for this, our journeys are often difficult & full of unknowns but we are driven by a strong will to make-it-happen.
BLP: What’s something people don’t know about you? A weird talent or something you’ve done?
SN: No weird talent for sure but I have lived & worked in 5 countries across 4 continents, if it counts! Oh and.. I have an incurable immune disease with which I have to live for life!
BLP: Ok 4 continents counts!! For people who are meeting you for the first time what piece of content are you most proud of that you’d like to share?
SN: I am proud of https://settlingnomad.com/ that I created and would love readers to explore. Unfortunately 2022 was super busy due to other priorities (As you heard from the interview) and I couldn’t update the site at all! But I am determined to get back to regular updates on our site and get back on track. I would request readers to visit our site for some quality content and subscribe for regular updates on our FIRE journey and also new posts on restaurant & grocery businesses. I also gradually plan on adding our experience staying in different part of the world, I have so many stories to share! At some point I would also open up about sharing my personal experience with Crohn’s disease.
BLP: if you were to retire but couldn’t stay in Canada, where would you go?
SN: We would surely want to spend few months of the year in India and for this reason we still have our apartment there. Summer gets extremely hot in India so can explore one of the Caribbean islands or South American nation to make it our home.
BLP: What’s something you splurge on or feel spending extra money is worth it?
SN: Daughters and wife, I am a good gift splurger and likes to surprise them. Also, going against the principle of being frugal and mindful, I love having a reliable & luxurious car. I love driving and a good car surely makes the experience better.
BLP: What advise would you give your 16 year old self?
SN: If I compare where I was and what we have now, we are a success unless something goes drastically wrong so overall I/we did good with our life. One advise would surely be to start saving & investing in more meaningful and organized way rather than taking ad-hoc and drastic approaches to building a portfolio.
BLP: Where can people find you?
SN: I am active on twitter with handle @SettlingNomads. My DMs are open and I am quick in responding back.
Of course https://settlingnomad.com/contact-me/ can also be used to reach out to me & finally I also have a Facebook page https://www.facebook.com/settlingnomad which can be used to connect with me.
BLP: Thanks for taking the time to sit down with us! Been great getting to know you a bit better! This has honestly been one of our best interviews yet! You’ve shared some wonderful experiences and project along with things to watch out for for others aspiring to become FIRE. Thank you for taking the time to share!!
-Cheers!
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