Quit the world at 34 and now "broken" and refuse to go back

[Retch The Grate]

Sigh. Why do we bother with sig lines if no one reads them...

inertia. I really should dig up my old .sig file and put it on here for that full 90s experience.

+1 to REWahoo for being the quote source.

 

[brydanger]

That is a very intriguing lifestyle change from living in a van to a $500K sail boat and $3M of rental property. As others have asked, I'm curious how much of that is leverage?

Still working on updating some of our spreadsheets…. but I would say we sit pretty well in our properties considering the speed at which we came by them.
The debt/mortgages makes up less than half of the current (fairly conservative) RE values.

How many years from van life to the $3.5M in property?

While that would indeed be an awesome way to tell the story, it would also be inaccurate.

This isn’t a rags to riches story in that regard.
I guess if you wanted to go back 12 years to when we had zero investments, massive student loan and other debt before we started this whole process rags to riches might apply… but the van travel simply started as a “sabbatical” mid-way through the process.

Many/most of the properties were purchased and remodels, etc were done before quitting our jobs and leaving to move into a van and travel mexico/central america.


Timeline wise, we bought our first investment (thought it would be our only) in 2006.
In 2008/09 we bought a few more and got serious about things while also starting to purge belongings, seriously downsize and payoff all non-mortgage debt (there was a lot of it).

After the insane jobs/work hours and the hours we were putting in on evenings and weekends to the properties, its little wonder we were looking for an escape, but in 2012 we quit and drove away in the van.

We just didn’t know (at the time) that leaving wouldn't be short term as planned, so when we came back in 2014 we got real creative about how to turn properties that were still just breaking even month to month into positive cash flow/passive income. Some of that required hands on work, some of it required creative designs and as-yet-untested of ways to best use existing properties. We were opportunistic…

Continuing to live/travel in the van was simply a way for us to reduce our overhead/expenses dramatically while continuing to do what we loved (traveling full time and exploring north america), so that our tenants could continue to pay down the mortgages and we could work on building our cash saving s back up in the process.

We lived van(s) pretty much full time until last year when we bought the boat and have been learning to sail while island hopping the caribbean ever since. The boat was clearly more expensive than the van... but our daily/monthly expenses are so far roughly the same in both lifestyles.

 

[Retch The Grate]

By now, it's clear that BryDanger took great risks, worked hard, and eventually reaped great rewards. The story was nowhere near complete in the beginning, but now, most of the holes have been filled in a fairly random (but apparently almost complete manner). While Bry doesn't acknowledge luck in his real estate investments, being in the right place at the right time can make all of the difference.

Kiyosaki really annoyed me with his books which were notably completely bereft of actual actionable details of how to do what he described and were just usual guru hype word salads. Very very not for me, but it's neat to see people for whom it worked talk about it.

 

[NW-Bound]

I found the original source of the term "lumpen slums of cyberspace", back in 2010. I thought it's older than that.

And yes, the poster was a lawyer. Darn, I still have a vestige of my "superior memory" after all.


PS. Click on the arrow thinggy after the poster's screen name, and you will be taken to the original thread. It brings back memory.

You are rather clueless, aren't you. SEC lawyers don't make seven-figure incomes or determine the course of human events.

But XSEC lawyers do.

And we'll do that long after you've taken down your inconsequential shingle and "retired early" because your working life is so meaningless.

I'm checking out of here for a better place, like my own blog maybe. Regret dropping in earlier this week. Didn't realize these are the lumpen slums of cyberspace.

 

[Bestwifeever]

Sigh. Why do we bother with sig lines if no one reads them...

You had us at numbers is hard....

 

[RunningBum]

Sigh. Why do we bother with sig lines if no one reads them...

I chose the option to not display sig lines. Partly a carry over from the days when I had slower internet and people would put pics in sig lines (maybe not here), and sometimes I'd have a hard time telling where a post ended and a sig began. Sometimes a sig would look like a very off base rant or comment.

So, don't bother with a sig line on my account.

 

[brydanger]

Kiyosaki really annoyed me with his books which were notably completely bereft of actual actionable details of how to do what he described and were just usual guru hype word salads. Very very not for me, but it's neat to see people for whom it worked talk about it.

I can't disagree with you for the most part. Not exactly a point by point set of instructions to wealth...

For us... it was just a few key points/ideas that we walked away with that hit us on a deep level
- Your primary home/residence is NOT an investment.
- The ability to leverage money in RE by letting banks hold the majority of the loan and allowing tenants to pay the loan off for you.
- Hire a set of professionals you trust and let them do their job.

That was enough for us to at least feel like we could make an impact on our financial status. Both of us coming from far-from-wealthy families... I think that might have been the first time we felt a bit empowered.
Funny though that someone probably could have just shared the same over dinner.

 

[Retch The Grate]

And now we take the thread sideways. This sig really required fixed width fonts... welcome to the 90s.

[FONT="Courier New"]..-. -. --- .-. -.. ..-. -. --- .-. -.. ..-. -. --- .-. -.. ..-. -. --- .-. -..
Retch The Grate aka ##############    Amiga, The Computer for The Creative Mind
Gaming is Life              Vote Discordian            \()/       //   /\
[url]http://cs.oberlin.edu/~#######/frontdoor.html[/url]          /  \     \X/   /()\[/FONT]

 

[Scrapr]

I

if you then take into account that some cities (Portland being one) didn’t actually nose dive during the housing crisis of 07/08 they simply slowed their growth slightly before taking off again…its astronomical the difference.

I lived the real estate bubble in Portland. The prices most assuredly did drop. Our revenue was off 70% top to bottom of the cycle. I think you mitigated the drop well by self performing & up zoning your properties. Good job there. Sometimes you just have to put your head down & work.

Case Schiller on Portland market. Looks like tipping point was June of '07 and recovery started Feb of '12

https://fred.stlouisfed.org/series/POXRSA

 

[daylatedollarshort]

This isn’t a rags to riches story in that regard.
I guess if you wanted to go back 12 years to when we had zero investments, massive student loan and other debt before we started this whole process rags to riches might apply… but the van travel simply started as a “sabbatical” mid-way through the process.

Many/most of the properties were purchased and remodels, etc were done before quitting our jobs and leaving to move into a van and travel mexico/central america.

Okay, thanks for taking the time to reply. So basically you bought properties to rent starting when you were working, eventually dropped the day jobs, did much of the rehab work yourself, had low fixed overhead (really low - van life), formed a LLC to do some work for others for extra income and put most of your money into real estate. And now, between using leverage and a rising real estate market in Portland, your properties are worth $3M, boat $500K and about half of that is equity. The rentals are largely cash flow positive enough now to pay for a management company to manage them and pay for repairs, plus throw off enough passive income to pay your living expenses, if you don't live too extravagantly (except for the boat).

I get that, though I don't think that is too different than what some of our friends and other posters here do for a living so I'm not sure why you didn't use plainer language from the start. I also am not so sure it would be something I would encourage others to do - put all their eggs in one real estate basket and hope for rising real estate prices. Shiller says in general most home equity just keeps up with inflation.

We live in the Bay Area and many of the people in our neighborhood could rent out their houses and live in a LCOL are on the rent. Not because any of us are brilliant investors but housing prices are just crazy high right now and most of us bought a long time ago. Home prices might go up further. London has even higher prices per square foot so it is not impossible. Then again we might have another 2008 where home prices in some areas dropped here by half.

 

[tb001]

I’ve been reading along and found this a very interesting thread. I’m way too risk averse to walk the path of the OP but I love hearing the journey. I would love to live in a small home or explore the world on a catamaran!

I think the point of the OP was to encourage people who are unhappy in their current situation to take a risk. That things will often work out. And I believe that for talented people, who have a bit of luck on their side, that’s usually true. It’s also a very different level of risk to do this in your early 30s vs late 40s, or do this when your background is in a rapidly changing technical field. There’s a lot of time to make things up if you’re 30 and your experiment goes sideways. Not so much if you’re 45-50 and your skill set is now out of date.

To the OP, in looking at your blog, you’re obviously a talented and creative designer and I would guess that has played a huge role in your RE success. My guess is that you would have been successful in most paths you chose, so kudos to you and your SO for taking a chance on yourselves. You’re very lucky to have a SO who shares similar values and encouraged taking a chance! I would love to live on a boat for a year but DH wouldn’t make it a week!

 

[brydanger]

Okay, thanks for taking the time to reply. So basically you bought properties to rent starting when you were working, eventually dropped the day jobs, did much of the rehab work yourself, had low fixed overhead (really low - van life), formed a LLC to do some work for others for extra income and put most of your money into real estate. And now, between using leverage and a rising real estate market in Portland, your properties are worth $3M, boat $500K and about half of that is equity. The rentals are largely cash flow positive enough now to pay for a management company to manage them and pay for repairs, plus throw off enough passive income to pay your living expenses, if you don't live too extravagantly (except for the boat).

Slightly different order of operations, the management company ran things before we left the jobs as well, and all of our LLC project money went to our living expenses and simply helping rebuild our savings rather than into real estate...
but yeah, you've got it.

I get that, though I don't think that is too different than what some of our friends and other posters here do for a living so I'm not sure why you didn't use plainer language from the start.

I guess it's already been determined in this thread that I had no idea the "correct language" to use in the original post.
Both the forum and the very idea of FIRE is brand new to me...

Unlike you, we don't seem to run in a crowd where this is commonplace language, nor where people could easily rent out their house and move to another area .
We just learned the FIRE acronym a few months ago from another couple we met and until then have never actually met anyone who even thought about, much less succeeded at RE in their 30s. To the contrary... I don't think any of our friends in OPDX have even started thinking about savings or retirement yet.

We live in the Bay Area and many of the people in our neighborhood could rent out their houses and live in a LCOL area on the rent. Not because any of us are brilliant investors but housing prices are just crazy high right now and most of us bought a long time ago.

Portland has treated us well, but is VERY FAR from being Seattle, much less SFO. Many of our friends have only begun to have the savings/salaries to buy their first home in the last few years/decade.
The properties in our portfolio still range from 350-650k... that probably sounds like a condo in the burbs to you.

My post here was never an attempt to claim brilliance at investing... rather to show there's another option to the "sit back and work/wait plan" that is so common.
I feel like 99% of people are so uber-focused on the earning/saving part of the equation to get to their "number" that they never consider tackling the problem from the opposite end.

We bought our first investment property in 2006 and didn't really even start thinking of ourselves as investors or buying additional properties until a few years later.

That means the entire time spent amassing our portfolio was 5-6 years. 5-6 years!!
Why didn't someone tell me that was an option when I was wasting money/piling up debt on college, or when I first got a salary??

I can't even imagine what would have been possible if we either realized/started earlier on, or if we had the strength to keep working and buying more... but I'm convinced in any decent growing economy and city, if someone lived and invested using similar principals...they could successfully RE with only 10 focus years of employment and investing.

But... there's certainly no way we could have done/be doing that in somewhat reverse order (watching our investments "come of age" while not working rather than working/waiting to retire until after they have) without having also tackled the problem from the spending side and cutting overhead/spending at the same time.

I know (now) this isn't the place for lean FIRE idea... and I get it, but the resulting lifestyle doesn't seem so lean from here.

 

[brydanger]

I’ve been reading along and found this a very interesting thread. I’m way too risk averse to walk the path of the OP but I love hearing the journey. I would love to live in a small home or explore the world on a catamaran!

I think the point of the OP was to encourage people who are unhappy in their current situation to take a risk.

NAILED IT!!

That things will often work out. And I believe that for talented people, who have a bit of luck on their side, that’s usually true. It’s also a very different level of risk to do this in your early 30s vs late 40s, or do this when your background is in a rapidly changing technical field. There’s a lot of time to make things up if you’re 30 and your experiment goes sideways. Not so much if you’re 45-50 and your skill set is now out of date.

I would actually say that part of the beauty of the approach we took is that you have CONTROL over whether/how things work out rather than simply having to wait it out or changing your departure date based upon what the index does out of your control.

A very wise (and happily retired) man in Mexico, when we asked for advice about taking a leap/risk that we were struggling with (essentially trying to decide wether to try stretching a 2yr sabbatical out into full time RE) said
"If you're young enough to recover, always take the risk!"

So wise on so many levels... and even more why I wish this path (or the ideas behind it) would have been introduced to us earlier on. If I had these ideas and the goals/focus/drive the day I got my first job rather than wasting 6years spending and buying "stuff"... I can't even imagine what we could have done!

You’re very lucky to have a SO who shares similar values and encouraged taking a chance! I would love to live on a boat for a year but DH wouldn’t make it a week!

I am indeed... especially when you consider all of this was basically her idea!
Okay, not the investing and saving... she actually never wanted to own a single property, but the quitting and running away to focus on happiness rather than money... thats all her!
Turns out, a large part of this game is knowing when enough is enough and actually taking the leap to reap the rewards rather than waiting until the "risk" of time becomes greater than the risk of not having enough money.

 

[gwraigty]

Kiyosaki really annoyed me with his books which were notably completely bereft of actual actionable details of how to do what he described and were just usual guru hype word salads. Very very not for me, but it's neat to see people for whom it worked talk about it.

I confess that I actually enjoyed his books and bought his incredibly overpriced CashFlow for Kids and CashFlow board games. What I got out of it all was the knowledge that I was excellent at saving money, but lousy at putting it to work to generate cash flow. I realize that current cash flow is not everyone's goal, but it's helped me to become a much better investor, though not in real estate. Even if all his hype was just that.

 

[brydanger]

I confess that I actually enjoyed his books and bought his incredibly overpriced CashFlow for Kids and CashFlow board games. What I got out of it all was the knowledge that I was excellent at saving money, but lousy at putting it to work to generate cash flow. I realize that current cash flow is not everyone's goal, but it's helped me to become a much better investor, though not in real estate. Even if all his hype was just that.

Yes!!
We played the game a few times with friends as well! Pretty good idea I thought, especially for kids!

I always say that the two things really never included into curriculum in our country (sadly) were communication and finances/money management.

Probably no two more important skills on the planet en route to adulthood and we don’t get taught anything about them until we’re thrown in the deep end to figure it out for ourselves. :/

 

[nomid1]

That's kind of what happened to me later in life. I planned to retire at 57, but ended up stopping a few years earlier. Can't believe how much fun I have and how busy I am. And no matter what, you see jobs listed all the time, I won't do it.



The big problem with jobs is trading your time for money. Mainly its personalities and politics and management at times. Misery is often there and money doesn't patch it.

 

[ExFlyBoy5]

I guess in my opinion they are not FIRE'd, just free lance workers. To me that is not being "retired" but still being in the work force. They just aren't working for megacorp anymore. The story then is not all that interesting to me. It's not a "look at me I'm FIRE'd and traveling the world story". BS, they are traveling a lot but still working and hustling a great deal. So no RE.

Perhaps, but as my DW loves to say, "If you aren't cooking for me, paying my bills or fornicating with me then what's it matter to you?"

 

[marko]

Perhaps, but as my DW loves to say, "If you aren't cooking for me, paying my bills or fornicating with me then what's it matter to you?"

I think a few people feel misled as, after a bit of digging, the narrative evolved/clarified away from the first impressions implied in post #1.

 

[HI Bill]

I think a few people feel misled as, after a bit of digging, the narrative evolved/clarified away from the first impressions implied in post #1.

+1. The OP may have quit his day job at 34, but he w$rked actively during the next 5 years, taking on significant real estate investments and risk, to apparently have to do no w@rk starting at 39 (last two years, if I understood correctly).

 

[brydanger]

+1. The OP may have quit his day job at 34, but he w$rked actively during the next 5 years, taking on significant real estate investments and risk, to apparently have to do no w@rk starting at 39 (last two years, if I understood correctly).

I think what I said was "zero work since July of last year".
We did wrap up a side hustle earlier in 2018, and before that had some years with no "work" and some years with (details below). I certainly don’t want to leave out any facts that could be misconstrued.

I think a few people feel misled as, after a bit of digging, the narrative evolved/clarified away from the first impressions implied in post #1.

Im trying to keep up as best I can, but I still fail to see what is “misleading” about the first post...
but it seems like you're saying/suggesting the same as:

I guess in my opinion they are not FIRE'd, just free lance workers. To me that is not being "retired" but still being in the work force. They just aren't working for megacorp anymore. The story then is not all that interesting to me. It's not a "look at me I'm FIRE'd and traveling the world story". BS, they are traveling a lot but still working and hustling a great deal. So no RE.

IF it's the age that’s somehow 'misleading' some of you in the first post (because oh my have I provided every possible detail time and time again ever since)… you guys tell me.

I honestly never know how to refer to it/describe our scenario either.
Life, as it turns out simply isn't that black and white (or at least hasn't been for us).

Quit the jobs and became free to do whatever we want whenever we want when I was 34… that’s why that number sticks out in my mind and its (by far) the easiest way to describe things.

In reality here’s every possible detail about every possible hour ive worked (if they somehow matter):
2012-13 - on "sabbatical" driving Mex and Central America
worked 0 days
2014 - built out a home-base for ourselves (in our former garage). It was kind of like building ourselves a cabin in the woods, but we prefer to live in the city and it gives us the ability to come and go as we like in between travels so we don’t have to kick out a tenant or put out our friends/family during visits (and will likely be our eventual home if/when we ever go back...
I doubt extremely that you would tell every FIRE'd member on this forum that if they spend any time moving and preparing a new house for themselves at any time after RE that they are no longer FIRE'd, but what do I know... i'm the new guy.
It did also increase the value of the investment and is currently rented out while we’re away, so if you prefer to label that as work its fine by me…. 

Worked 60 days
2015 - similar project on another property, but other than a few things we did ourselves mostly managed over about 2 months. Ill be extremely generous, lets say
Worked 20 days
2016-17 - I took a few “architectural design projects that we did accept money for, so im sure you’ll want to count that.
We're talking about stuff I did while traveling/adventuring and in the middle of the night while DW was sleeping (meaning it certainly didn't impede on any fun… but I know you’ll want to count that. All projects combined were less than 200 hours total. Thats less than 25 work days…
Worked 25 days
2018 - We had to pick up the slack from our business partners in side hustle2 in order to save face and keep promises made to others - lets go big and say
Worked 75 days
2019 -
Worked 0 days

SO, lets do the math…
From the time I quit the job in 2012 until this very minute I have “worked” by whatever possible definition you use (ive already described all these projects as ones o would have done for free/fun without money, but it’s your forum, so we’ll play by your rules) a grand total of
180days


Thus my dilemma.
Should I have titled the thread “Quit the world at 34 (but also worked on and off about 180days worth of hours cumulatively over the next 7 years on passion projects and those that helped ensure our investments created passive income as fast as possible)”

I don’t, know… maybe. But honestly, what difference does it make??
Combine all those hours and i’ve "worked" are less than another half year total in small bits and pieces over the last 7 years on projects I love and would do (often do) for free.

Call it whatever you want, or I can go back and change the title of the thread to
"Quit the world at 34 1/2years old" if you like, or maybe
"RE after working a cumulative total of 12.5 years out of life to date" is more accurate.
Whatever works best for each of you is fine by me (and I don't actually see where I can edit the title...so I would need some coaching after you all taker a vote).


But as ive already said elsewhere (yes, im stealing a page from another poster and about to quote myself)

But luckily I didn’t come here looking for your sign-off of what I should call our status, or whether we’re somehow worthy of the term FIRE in your eyes.

Call it whatever you like actually…
We no longer work for anyone else, we no longer have to take projects for money (but I reserve the right to take one because it sounds like fun and fulfills a passion I haven't used enough in my life), and I sometime choose to spend my free time helping neighbors back home achieve a better state of FI and helping our friends reach happiness and/or RE sooner.

If you have a better acronym for that, by all means please send it along...
until then I think we’ll continue to use the labels FREE and HAPPY!

For what it's worth...
In between responses I've had a little bit of time to start browsing other "I am" posts... and frankly lots of other threads in general.

And while im learning a LOT about the forum and patterns in general of the forum overall (and the people within it) -
I've yet to stumble upon even one other thread where the poster has been put under this level of scrutiny and asked for (much less offered to reply to) this level of detail about their work, life, RE and time spent after.
Anybody have an example of others so I can learn from them?

Honestly, Im happy to keep doing so if its actually helpful to the community (ive been nothing if not transparent)... but it does seem oddly out of sync with the other threads i'm reading/responding to.

 

[Retch The Grate]

We live in the Bay Area and many of the people in our neighborhood could rent out their houses and live in a LCOL are on the rent. Not because any of us are brilliant investors but housing prices are just crazy high right now and most of us bought a long time ago.

My friend rents out his house in Milpitas and lives in his BMW Sprinter van still in the bay area since this is where his friends are, and works only when a cool project rears its head. Uses a management company and is happy to have them. He's living on way less money than I would want, and has tighter margins than I would, but of course he could stop taking short term contracts only when he wants them and go back to full time programming work fairly easily still so he has that backstop.

The house is the only remnant of his dot-com era money. We've discussed his rate of return, I think I got him to realize that as his ownership of the house has increased, his effective rate of return on the rent has dropped below the stock market.

 

[NW-Bound]

My friend rents out his house in Milpitas and lives in his BMW Sprinter van still in the bay area since this is where his friends are...

The house is the only remnant of his dot-com era money. We've discussed his rate of return, I think I got him to realize that as his ownership of the house has increased, his effective rate of return on the rent has dropped below the stock market.

Is this a red flag when an expensive house does not command a commensurate rent, meaning the house is overpriced?

 

[HI Bill]

Is this a red flag when an expensive house does not command a commensurate rent, meaning the house is overpriced?

In many HCOL areas, available rentals are plentiful (or adequate) due to the time/cost when the owners purchased them. If you were to buy a house or condo today, say, in Honolulu, and financed 80%, it would be impossible to break even, much less, make a profit. However, the houses are not overpriced, because demand continues to outstrip construction (and supply), and the cost of new construction is rising faster than rents.

 

[daylatedollarshort]

We've discussed his rate of return, I think I got him to realize that as his ownership of the house has increased, his effective rate of return on the rent has dropped below the stock market.

Don't most people who own rental real estate also count on some appreciation as well as benefits from the tax deductions? Why only count rent? Also Prop 13 tends to have a lock in effect to keep properties with a low tax base. That's part of what is causing the housing shortage.

 

[Amethyst]

No doubt because yours is one of the most assertive stories of "real" early retirement that I can recall from the last 10 years. So many of us had to wait till late middle age, to collect pensions or accumulate a certain amount of $$.
Even the ones who depend on rent in retirement, tend to be far older than you. And I don't recall anyone who raised their kids on a boat, in a van, etc. although I could be forgetting somebody.

So, it's got people going. I'm enjoying the discussion, even though it has nothing in common with my personal retirement. In addition, I'm jealous of people who have you as a pal designing things for their homes!

Have you given much thought to depreciation recapture, once you decide to sell your properties?

I
And while im learning a LOT about the forum and patterns in general of the forum overall (and the people within it) -
I've yet to stumble upon even one other thread where the poster has been put under this level of scrutiny and asked for (much less offered to reply to) this level of detail about their work, life, RE and time spent after.
Anybody have an example of others so I can learn from them?

Honestly, Im happy to keep doing so if its actually helpful to the community (ive been nothing if not transparent)... but it does seem oddly out of sync with the other threads i'm reading/responding to.