Financial Update: Finally Free?

Nothing to see here, just quitting our jobs and riding off into the sunset

Nothing to see here, just quitting our jobs and riding off into the sunset

Been a while since posting a financial update or spending report. We have been busy with other stuff, quitting our jobs and moving into an RV for example; we also switched most of our spending in recent months to a credit card that Mint wouldn’t track (one of the lesser known perils of credit card churning) so had gotten behind on tracking expenses; mainly, we’ve been lazy and procrastinating.

Right now seemed like a good time to capture a snapshot of our financial picture as we enter this non-working phase of our lives: As of two weeks ago, we’ve both quit our jobs, and we hit the road. Our final paycheck income has trickled in, and after a period of moving fast to reach our first destination, we’ve settled for a bit with plenty of time to catch up with friends, family, and finances. This also means we have reliable WiFi and no longer have work or moving as an excuse for procrastinating.

Net Worth

As of our last (ever?) paycheck:

  • Total Net Worth: ~$1,165,000

That’s a net worth increase of ~$250,000 since our last financial update at the beginning of the year. A fair bit of that net-worth increase, ~$100,000, was from selling our house. The rest of the increase comes from the difference between our income and spending, and market gains (if any) over that time. Markets have been pretty volatile, and the number I quoted above is already out of date.

Anticipated Spending and Withdrawal Rate

Your guess is as good as mine…

Looking at the last fifteen months, our spending excluding housing, childcare, and the RV purchase, has averaged approximately $1,200 / month for an annual total slightly below $15,000.

How do you translate that to spending while living and travelling in an RV, or living in some future unknown location?

For the sake of estimating, while playing it safe, lets say our variable spending increases 25% due to the inefficiencies of being on the road, and say, pulling numbers out of my ass, we spend $1,500 / month on some kind of housing expenses, and another $500 / month on childish expenses (I have no idea how much growing kids cost): that leaves us spending $3,500 a month, or $42,000 annually. That’s about a 3.5% withdrawal rate which seems reasonable enough, at least based on spending numbers I more or less made up.

In reality, like always we’ll be spending as little as possible, while trying to live as awesome as possible. If that means we spend less than the above, and our investments do great, then we are probably set for life. If we spend more than planned, or markets do horrible, well I guess it would have turned out to be a bad idea to quit well paying jobs without a definite plan (who would have thunk it). I suppose we could always trade our wage labor for more capital if that turned out to happen.

Retirement, Sabbatical, Bumming Around: It’s All Semantics

That brings up the question: Are we done working for good? Again, your guess is as good as mine. I’m happy to use the term sabbatical, mainly because I like pretentious words. I only have three or four non-school working years under my belt, and I don’t mind working on fun projects if they come up. The other one of us, on the other hand, has been slogging away for ten years (that’s a long time..), and is pretty sure she’s done working for good. We’ll see what the future holds. For now, too busy having fun, napping, and corralling dogs and toddlers to worry about it too much.

Life tip: Always carry a hammock in your extra storage for an emergency. Break out in case of sunny, lazy, afternoon.

Life tip: Always carry a hammock in your extra storage for an emergency. Break out in case of sunny, lazy, afternoon.

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12 Responses

  1. I still bet you guys won’t ever go back to full-time work. 🙂 How’s RV life treating you? Are you happy with your choice so far? I’d love to read a big post about the pros and cons of it, even if it’s just a point-in-time portrait. Congrats on making the big leap!

    • The MC says:

      Thanks. Fairly happy so far. If anything I sometimes wish we went smaller, the mileage and driving around towns is a bit of a pain, but then it’s relatively comfortable when we are stopped. Whole bunch of trade-offs. I’m trying to get a bit more time under our belt before making definite judgement, but will try to post updates with what I’m learning at good times.

      • Funny – towards the end of our travels in the 4Runner, Travis was convinced we should have gone bigger (i.e. small RV-style). I guess the grass is always greener…? Congratulations on taking the jump and being free 🙂

        • The MC says:

          A bit is grass is always greener syndrome. Though I think for us the 4Runner would have been too small 🙂
          Mostly something smaller while driving, and pumping gas, would be nice, but the amount of space when parked is pretty good.. trade-offs 🙂

  2. Miss Mazuma says:

    Me too! I would love to read about the transition to RV life. I imagine there is a big learning curve that you are experiencing and I can’t wait to read more! 🙂

    • The MC says:

      Lot’s of learning, still going on. And pleasant surprises: found out we have an outdoor shower (really a hose with a shower-head). Seems like a gimmick, but given dogs and the mess they get into, it has already proven really valuable.

  3. Congrats! I believe you guys are ahead of schedule correct? Good thing you’re using the term sabbatical or the retirement police would come storming in 🙂 Would be great to hear more about the RV life.

    • The MC says:

      Thanks. We are a bit ahead, so it’s all up in the air. Trying to not write only about RV stuff, but that’s what’s keeping us occupied at the moment

  4. What made you pull the trigger earlier, any specific life event? Has the plan always been to go RV?

    • The MC says:

      The answer to both is that it seemed like a good idea at the time..

      For pulling the trigger earlier, we had a very good and unexpected offer on our house, with timing that worked well with our professional and personal plans: http://www.fi35.com/we-sold-our-house/

      We hadn’t thought about RVs until this summer, but I happened to walk by one for sale while walking the dogs one day, and that got the ball rolling: http://www.fi35.com/that-time-we-bought-a-new-home-for-6000/

      Everything kind of fell into place from there.

      • So losing any payment on the mortgage and then replacing that with a lump sum pushed you over the edge, I like that math. I’m definitely interested in the RV plan and how that goes, our plan after FI is to take 1-2 years of travel, but have not decided how this will occur and what modes of transportation along the way…..interesting for sure.

  5. Mrs PoP says:

    I read most of your MMM journal when I was bedridden a couple of weekends ago, so had a sneak preview of the sunset shot!

    So happy for you guys and hope that you continue to make good use of the hammock for many years in the future.

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