IndependentlyPoor
Thinks s/he gets paid by the post
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.
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.