ER experiences

[IndependentlyPoor]

My partner and I FIREd 4.5 years ago at 50 and 45. We had been living the standard upper middle class life of high-tech geeks in Austin, Texas until a ominous diagnosis. Then followed a predictable IMG! LIFE IS SHORT! TIME TO LIVE! reaction, so we sold our home and almost all of our possessions, bought a cruising sailboat and lived on it for 18 months while meandering from Galveston, Texas to Providence, Rhode Island. Cruising, as great as it is, wasn't going to work for us long term, so we sold the boat and traveled full time for a couple of years. Now we are back in Austin, renting a small apartment and living quite happily on less than half of what we spent before retirement.

Why am I telling you all of this? Because in addition to providing necessary cash, selling our home and possessions was crucial to breaking out of the social-economic rut that we were in. It was an incredibly liberating thing to do, but it was also gut wrenching. For us, the key was having an exciting, somewhat romantic dream to pursue. Downsizing and dramatically changing lifestyle would have been too emotionally difficult without something exciting on the horizon. Our self image was tied up in our possessions and our careers and giving that up would have felt like defeat.

Enough navel-gazing. Some points:

1. We felt that our house had appreciated to the point that our asset allocation was out of whack, made worse by the fact that Texas is a no income tax, high property tax state. Our rent now is less than the property taxes were in 2004. I would hate to think of what the taxes would be on that house now.

2. Selling our belongings produced almost two years of living expenses. About half of that was from selling an almost new car and piano that we would not have purchased had we planned to retire early. Except for the car and piano, we sold everything on Craig's list at garage-sale prices: maybe recouping 20-25% of the purchase price on the average.

3. While we were traveling, we rented a small storage room for the stuff we didn't sell. Not having a house to worry about (or pay for) was a big advantage while we were away, plus investment income from the proceeds helped.

4. It took about six months from decision to living on a sailboat. I can't imagine doing it in less time.

5. We found that budgeting for wildly different lifestyles is indeed possible. We probably ended up spending about 25% more than we expected, but we had allowed for that.

6. Re-entry: some bumps, but not bad.
You might think that were lucky and sold our house near the peak, but Austin home prices continued to appreciate and we are now effectively locked out of the market so we are renting and waiting. If local condo prices ever return to a reasonable level we might buy one.

Before settling in our current apartment we lived in five different fully-furnished houses (both between trips and after we returned), all of them rented from friends or friends of friends who happened to be away and were delighted to have reliable house sitters.

[friar1610]

Cool story!

There's another recent thread where a couple of us talk about the upper middle class lifestyle - what you think you need is a whole lot less than what you really need. I've never been to Austin, but my understanding is that it's a pretty sophisticated, upscale place, no doubt greatly influenced by the brainpower that UT and associated businesses bring there. As great as that all is, there's a tendency is such places to get your thinking out of whack (as I did for years in the DC area) by all the affluence you see around you. The trick is to find that sweet spot where you have enough to be happy but not so much that you're slaving away for the "stuff." For too many people, their possessions own them, not the other way around. Sounds like you've figured it out!

[Coach]

Thanks, good post!! Welcome to the forum.

Coach

[BunsGettingFirm]

This is a good topic. I think breaking away will be harder than most people think. Like it or not, we tend to invest some energy into shaping what others think of us in order to, if nothing else, avoid the uncomfortable and somewhat annoying chain of questions when you do anything out of the ordinary.

[GoodSense]

Thanks for sharing! I've always wanted to sell the junk in our house/garage and simplify, but like you said, it's hard to do without a sudden life-changing event. Maybe when the prospect of FIRE becomes closer, I will be more incensed to get rid of stuff and travel the world. Very inspiring!

[freebird5825]

Welcome to the forum
Great story.
I am looking at doing a similar thing in 10 years when dh2b retires. We will be older than you were when you ventured out...but the idea of selling it all and striking out on an adventure is fascinating. Time will tell...

[militaryman]

Nice Post! Sounds like you made some choices that worked out to your liking.

Perspective on .... "Our rent now is less than the property taxes were in 2004." I would imagine that your apartment is vastly different in square footage, privacy and ammenities than your house was so I'm not sure what this comparison means.

I think many folks who own a home could perhaps find an apartment that rents for what the tax bill is, yet they don't do that because they enjoy the standard of living (space, privacy, ammentities, neighborhood etc...) that the house affords.

[IndependentlyPoor]

Thank you to everyone for your welcome.

I see that my post wasn't as clear as it should have been, and was maybe even misleading. I probably shouldn't have tackled such a difficult topic in my first sortie.

Given my druthers, I would have retired at 55 and maintained our upper-middle-class standard of living. I figure that five additional years of savings plus reinvesting (instead of spending) investment returns would have about equalled the amount we realized from selling our house. We could have had the same size nest egg as we have now and still owned our house to boot.

Retiring earlier than we planned required a huge change in standard of living and we took an extreme risk in doing so. We might well have been miserable, and we would not have been able to go back. I don't believe that either one of us could have found work again at anywhere near our previous salary.

I hope that I don't seem smug or self-satisfied with our choices. Believe me, I am about as far from smug as it is possible to be. Instead, I am amazed and relieved that we were able to get away with such a crazy plan at all. We did find that we could be happy living several rungs lower on the socio-economic ladder.

I did not mean my tax-to-rent comparison to be apples-to-apples, but more like an ironic juxtaposition. It hints at what a big step down we took, but I guess the main point is that the only way we could make our sudden, unplanned ER work was to sell our house. The combination of not paying real estate taxes and the investment return on the proceeds of the sale was the last bit that allowed us pursue our adventures.

I do not mean to imply that such radical downsizing is in any way better or, heaven forbid, more virtuous than a more traditional retirement, and I don't recommend that anyone pursue a similar course. It is just too risky, and I would feel terrible if a posting of mine contributed to somebody making a poor life decision. Without the medical scare we would never had made such a drastic change of plans. However, I do read posts in which folks are entertaining such ideas I wanted to share our experiences, both good and bad. It is possible for a middle class couple to suddenly chuck it all and go cruising (or RVing or whatever), but the stakes are stratospherically high and the choices are impossibly hard.

Just sayin'...

[REWahoo]

Quote:

Originally Posted by IndependentlyPoor I did not mean my tax-to-rent comparison to be apples-to-apples, but more like an ironic juxtaposition.

I thought it a reasonable statement and certainly supported by property tax rates and rents in the Austin area.

Example: If your home was appraised at $500,000 property taxes would be approximately $12,000 per year. There are loads of apartments in Austin you can rent for $1,000 per month.

[RunningBum]

The apples-to-oranges of comparing a 500K (or whatever) house to an apartment is ok, because if you are as happy with oranges as you were with apples, you can live with it. That's a good observation of what the OP has found for themselves, that others may find too.

I don't think the Austin market got quite out of whack as much as some of the other markets in the country, at least from my experience in the under $200K market. Just the fact that there is an under $200K market in a safe neighborhood with good schools tells me that. I could be wrong about the mid-to-high end. But I don't know that I'd be waiting for condos to "return to a reasonable level", unless maybe you are talking about some of those downtime high rises and lofts.

[unclemick]

Quote:

Originally Posted by GoodSense Thanks for sharing! I've always wanted to sell the junk in our house/garage and simplify, but like you said, it's hard to do without a sudden life-changing event. Maybe when the prospect of FIRE becomes closer, I will be more incensed to get rid of stuff and travel the world. Very inspiring!

Katrina. Kansas is as far as we got.

heh heh heh - The government cleaned any remaining debris off the slab and highway for free. .

[Bestwifeever]

I hope the ominous diagnosis you referred to in your initial post is being kept at bay for a long time.

Posts like yours are very helpful--and you did not come across as smug in the least. Welcome!

[unclemick]

Quote:

Originally Posted by Bestwifeever I hope the ominous diagnosis you referred to in your initial post is being kept at bay for a long time. Posts like yours are very helpful--and you did not come across as smug in the least. Welcome!

True. True. I'll take my 'yer layed off(1992)' and Katrina(2005)' involuntary offers I couldn't refuse over medical anytime.

However you got to ER - enjoy.

heh heh heh - .

[WhoDaresWins]

I very much enjoyed your post, IndependentlyPoor, and I understand completely what you wished to convey. Most of us could lighten our material load by 90 percent and lead high quality ER lives. We expend a lot of our resources on overhead that does not add significantly to our lives. And believe me, I know all too well how life can come at you like a train wreck and how the things that were once so important can be rendered meaningless in a flash.

[NW-Bound]

Quote:

Originally Posted by IndependentlyPoor ... we sold our home and almost all of our possessions, bought a cruising sailboat and lived on it for 18 months while meandering from Galveston, Texas to Providence, Rhode Island. Cruising, as great as it is, wasn't going to work for us long term, so we sold the boat.

Full-time boating did not work out for you, but at least you tried it. You might have already read Weston Martyr, The Southseaman, The 200 Pound Millionaire, but I just recently stumbled across it, not being into sailing. The following excerpt from that was written regarding a man's decision to sell his house and live full-time on a small boat.

"... let's call it courage; the courage to step out of your rut. It looks hard; but a mere step does it—as I found out."

For most posters here, the metaphorical rut applies to our megacorp job too, not just our living conditions. And you have done both!

Welcome aboard.