How I became financially independent in 5 yrs

[Brat]

It takes a lot of work to find the right place to buy, you just don't call a realtor and have them find the perfect place. In my relative's situation he knew the community very well. He watched where the 'smart money' folks moved when they retired. He and his wife had to sell their home when they divorced, he put his share of that in CDs because he wanted to pay cash for his next home. Then he used the internet to find studios with parking and a deck/terrace. He visited them as they came on the market and in that process crossed buildings off the list. He really researched the buildings and when the right one surfaced he was prepared to make an offer.

The 'cure' for special assessments are sufficient HOAs on an ongoing basis and a through inspection of the building before you buy. Take along a retired, irascible, architect to discuss what issues might develop in the next 10-15 years. Buy in a building where the other owners have sufficient income to vote FOR HOA reserves that are necessary to preserve the building, not in a building where the other owners are just scraping by. Go on the city/county building department's website to see what permits have been issued in the building, google the building name + engineer. See if owners are investing in their home.

It's work but the payoff in lifestyle can be huge.

[REWahoo]

Quote:

Originally Posted by Brat Take along a retired, irascible, architect...

That's a bit redundant isn't it?

[haha]

Quote:

Originally Posted by ATC KH There is no way that I could live on 6k/year even with a paid of condo. Just property taxes plus association assesments cost me $5772 per annum alone.

That may be what she means-$6000 in housing associated costs.

Ha

[Brat]

Yes, I meant $6,000 in housing associated costs.

[ATC KH]

Quote:

Originally Posted by Brat Yes, I meant $6,000 in housing associated costs.

That seems more reasonable. You had me thrown when you referred to $6000 as yearly living expenses. I define living expenses as not just housing associated costs but any cost incurred to maintain a desired standard of life.

[FUEGO]

Hmmm... $6000/yr in housing costs? I could probably do it in my current single family house. Although deferred maintenance would eventually catch up.

1417 - taxes
400 - insurance
1800 - nat gas and elec
600 - water, sewer, trash, recycling, stormwater
420 - internet

$4637 total per year. That leaves $1363 per year for repairs, maintenance, capital expenses, etc. Probably doable as long as I can keep handy and do some work myself. This assumes a paid off house obviously (1800 sf on 1/3 acre in the city).

[Bimmerbill]

Dang! I'm more like:
$5500 taxes
$800 insurance
$2000 heating oil
$1200 electric
$500 propane
$1000 internet.

I gotta move out of the Northeast!

[Brat]

It is my observation that housing costs are related to the size of your home, its energy efficiency, and local weather. The level of property taxes, sales taxes, state income taxes are largely a community culture issue - for a given level of services money must be collected. There are indirect housing costs.. it is cheaper to live in the countryside but transportation costs to necessary services (grocery store, health care) are higher.

IMHO, select the environment in which you want to live then find the best value in small (very small) home. If you find an empty lot (or tear-down) in a great neighborhood place a tiny home on it and have a large garden. Take care that the home is suitable for you late in life (I found such a house at the last Seattle Home Show).

[FreeAt30]

Quote:

Originally Posted by W2R Neither of us would do exactly the same as Jacob, but it was great food for thought and gave us some interesting ideas.

I started reading his blog a while back. I agree with W2R. Just because DW and I have no need to employ the things he talks about, it doesn’t mean that there aren’t a lot of great ideas in there.

Quote:

Originally Posted by brewer12345 My two under 6 kids would probably be thrilled with a fulltime RV lifestyle. Homeschooling would be a drag, though.

Most kids are thrilled with that kind of lifestyle in the country. It’s so much fun. My DW and BIL both grew up in that kind of lifestyle and they talk about their fond memories all the time. They are both capable adults now. I would say that they are even better adjusted than me (city kid with greater financial enablement (it really wasn’t enabling at all)).

It’s a side rant, but it really makes me sad to see so many kids these days with so much material nonsense and so few having fun.

[Kcinnick]

I thought my goal of 2500 a month on a combined salary of 85k-110k was aggressive. I guess I need to look at my expenses again.... I could never do 70 percent, but maybe 50, it would be easier in a 110k year!

[stoutboy]

$83 a month for Internet? Is it a combined cable TV package? If not, that seems really high to me.

Quote:

Originally Posted by Bimmerbill Dang! I'm more like: $5500 taxes $800 insurance $2000 heating oil $1200 electric $500 propane $1000 internet. I gotta move out of the Northeast!

[wcv56]

Spent most of last 20 years where food, housing and vehicle was provided, 7 day work weeks. Monthly expenditures around $250, cigs coffee, chips and toilitries.
So far this year I have given away 70% of what I have made helping others,
most of it was not asked for but just because I could. I went about 15 years without medical insurance but now have it through work for free. Vacations have been extreme which would blow the cost of 10K a year living out of thye water.
I did go 18 months without a day off and slept on a foam pad on the floor at work. Wages have not always been that great but coming out of a divorce almost anything was fine just to get away from the ill feelings.......

[laurinsane]

I could definitely live off of lentil soup and a very simple diet. Not sure about the mercury in the tuna fish these days. It all depends on your level of comfort. The bottom line is, the less you are willing to live with, the faster you will reach FI.

Haven't gotten into reading the whole blog but I'm sure I will.

Also to comment on earlier posts. I loved RDPD. Just gets you thinking about money in a different way. I don't care if Rich Dad was fictional or real. The concepts get you thinking. How can I make my money work for me instead of me working for my money?

[Onward]

Quote:

Originally Posted by laurinsane Haven't gotten into reading the whole blog but I'm sure I will.

Lately I've been really impressed with Jacob's blog. It's one of my favorites. Sometimes I think he's a little too sure of himself, but I can easily overlook that.

[Major Tom]

Thanks to this forum, I discovered Jacob's blog a few days ago and have been glued to it. His assertion that you should aim to keep your housing costs in the range of 200-400/month per person threw me a bit until I realized that he's talking about just the land rent and not including the cost of their RV.

Now I don't feel quite so bad for my monthly rent of $640 including utilities in the Bay Area (in a nice house). I'm still looking for lower though. Not yet ready to move to another city.

[bow-tie]

Quote:

Originally Posted by Onward Lately I've been really impressed with Jacob's blog. It's one of my favorites. Sometimes I think he's a little too sure of himself, but I can easily overlook that.

I think you have to be incredibly sure of yourself to pull off what he's doing. It explains all of us working longer to stash a bigger nut to live off of. I don't have the cajones to try what he's doing... trying to find some sort of compromise.

[kombat]

Quote:

Originally Posted by laurinsane I loved RDPD. The concepts get you thinking. How can I make my money work for me instead of me working for my money?

I agree, the book does indeed get you asking those questions.

Of course, the book would have been much more useful if it had actually offered a few substantive answers to those questions, rather than just a bunch of fluff, rhetoric, and hand-waving. Putting aside the nonsensical assertion that real estate values will rise indefinitely (which looks downright comical in the current post-meltdown economic context), and the outright illegal advice (openly advising readers to engage in liar-loans to obtain mortgages for investment properties they wouldn't otherwise qualify for), the book is frighteningly short on the details regarding how to actually implement "making your money work for you."

The best thing I can say about RDPD is that it gets people thinking about their finances. Kiyosaki's credibility took a further nosedive when the "Rich Dad" conference series bearing his name was exposed as a scam, luring people into overpriced training and encouraging participants to rack up tens of thousands of dollars on their credit cards to pay for training and investments, even going so far as to provide people with scripts they can use when calling their bank to obtain higher credit limits!

The jury is still out on whether Kiyosaki is doing more harm than good in the personal finance world.

[Onward]

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Originally Posted by Brat Buy in a building where the other owners have sufficient income to vote FOR HOA reserves that are necessary to preserve the building, not in a building where the other owners are just scraping by.

I learned the hard way that this point is extremely important.

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Originally Posted by FreeAt30 It’s a side rant, but it really makes me sad to see so many kids these days with so much material nonsense and so few having fun.

They're just training to be adults.

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Originally Posted by kombat The best thing I can say about RDPD is that it gets people thinking about their finances.

I would go further and say it gets people thinking about the different ways income can be generated (the quadrant). To financially uninitiated people (like me, back then) who equate pay with a j*b, RDPD can be an eye-opener.

IMO, Kyosaki is a shameless capitalist and marketer, but I have to say his book changed my thinking in some very beneficial ways.

[jacob]

Quote:

Originally Posted by Major Tom Thanks to this forum, I discovered Jacob's blog a few days ago and have been glued to it. His assertion that you should aim to keep your housing costs in the range of 200-400/month per person threw me a bit until I realized that he's talking about just the land rent and not including the cost of their RV.

No, I really do mean the total rent. You could add the depreciation cost of the RV to the rent we pay if you want to. We bought the RV in cash, so the number to add would depend on the sales price and how long we stay here.

This limit is pretty hard to meet in CA although it's easier in NorCal up near OR. Extreme measures are required in the bay area.

We used to pay $660 in rent for a two-bedroom house when we lived in Indiana---$330/person. California is very expensive, but it is easily possible to find $200-400/month/person places in other states.

[LOL!]

^Right. You could become part of the community living in long-term parking at LAX.