Financial Update: Finally Free?
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.
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 Markets have been pretty volatile, and the number I quoted above is already out of date.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…
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.