When Christy Shen and Bryce Leung decided to achieve financial independence in 2012, one of the first things they did was change their investing strategy.
For years, the Toronto-based couple had been saving for a home, keeping cash in a bank account for the down payment and closing costs. But as home prices rose in their market, they started considering other options. That’s when he discovered the Financial Freedom, Retire Early (FIRE) community through bloggers like Mr. Money Mustache and JL Collins.
At first, some parts of FIRE seemed unrealistic, including the idea that a person could retire at age 30 through basic index investing.
“I really didn’t believe it,” Shane told Business Insider.
However, after studying the 4% rule and running his own numbers, he concluded that a $1 million portfolio could support his modest lifestyle. Their FIRE number was calculated by multiplying their annual expenses – approximately 40,000 Canadian dollars – by 25, based on the 4% rule which is a common rule of thumb in the FIRE community.
The couple redirected the approximately 500,000 Canadian dollars they had saved for the house into an index fund and continued to contribute to their portfolio. By 2015, he reached his goal and quit his engineering job to travel the world. BI confirmed his seven-figure net worth by reviewing screenshots of his investment portfolio.
Shen and Leung have been living off their portfolio ever since. He has also earned some income from his two best-selling books, “quit like a millionaire” And “Parent Like a Millionaire (Without Being a Millionaire),” but he said they don’t depend on that income to maintain their lifestyle.
Achieving financial independence requires a two-part strategy: first, aggressively building wealth by saving and investing most of your income, and then restructuring your portfolio to generate reliable income in early retirement.
They call this the “two-step FI investment strategy.”
Shen and Leung spent several years traveling the world on $40,000 CAD per year. Courtesy of Christy Shen and Bryce Leung
1. Accumulation phase
During phase one, or the accumulation phase, Shen and Leung focused on building wealth. couple used a variety of savings strategies – Which includes reducing the three major expenses (housing, transport and food) and avoiding lifestyle downsizing – saving and investing up to 70% of your income. He said that their combined income started at about 65,000 Canadian dollars and reached about 160,000 Canadian dollars.
They were comfortable maintaining an aggressive portfolio during this phase because the money was for long-term growth, Leung explained: “You usually want a relatively aggressive allocation where it’s mostly equities. You can go up to 75%, 80%, even 90% equities because you don’t need that money right now and you’re trying to get future gains to reach your FI goal.”
Shen and Leung invested in low-cost index funds tracking US, Canadian and international markets. They also took full advantage of tax-advantaged accounts.
“Anytime you get an opportunity to get free money or tax-advantaged money, you definitely want to take advantage of it,” Leung said, pointing to accounts like 401(k)s, Roth IRAs, HSAs and 529 plans. “The less money you give to the government, the more money you have for yourself.”
2. Income Stage
Once the couple achieved financial independence and stopped working, their strategy shifted to what they call an “income strategy.”
At that time, their goal was no longer just long-term growth. Instead, their focus was on generating enough income from the portfolio to cover living expenses without having to sell investments during market downturns.
“Instead of relying on capital gains and just looking at the total value of your portfolio, what really becomes important is how much your portfolio is paying dividends and interest and other types of income,” Leung said. “Because when you really need money every year to live, you can’t depend on the wild fluctuations of the stock market.”
This matters most in the first few years of retirement, which may be the most vulnerable situation for a new retiree. If you retire and have to sell investments immediately when stocks decline, it could cause permanent damage to your portfolio.
To minimize that risk, Shen and Leung aim to cover as much of their annual expenses as possible with portfolio yield — income from dividends and interest, rather than from selling investments. This way, they are less exposed to recessions when they need cash flow most.
Some ways to make that work: reducing living expenses, shifting more of the portfolio toward fixed income, and adding higher yielding assets.
That said, it’s fine to have a high equity allocation when you’re building your portfolio, but in retirement, you want stability and income. This means taking some money out of more volatile stocks and putting it into assets designed to generate income and maintain a better position during market fluctuations.
“What you do in that situation is you move money out of equities that are very volatile and put more money into more stable assets, such as bonds, preferred shares, real estate investment trusts and these types of investment vehicles,” Leung said. “Their job is to pay out income rather than being a high-flying stock, and then you live off that income.”
He said this strategy has been particularly useful during the market volatility of 2026.
“What I’m doing is moving more money into higher dividend and interest paying assets,” Leung said. “As a result, even if the stock market is falling, we can wait and not sell anything because the interest is enough for us.”