Warning: LONG post.
After a great victory the day before yesterday, I thought I should tell you all some of the things I've tried in the last months.
Having some background on living frugal, I discovered ERE book and site in January of this year. I already was tracking my expenses, so it was easy to build the first spreadsheet to calculate how much time I would spend working to stockpile all the money I would need to ERE. I was quite investment averse, and had no good plan to scape. My first calculations said that I would retire only 20 years from now. That would be 50 years old. No way!
While reading the whole blog in a row and the book, I started making changes to lower that time I still needed to work. Soon the bigger expense remaining was my rent. Then I told myself that my biggest challenge this year should be stop paying rent, or at least lowering it so much that I could forget about it. My spreadsheet was already telling 6 years to go, with 75% savings rate. But to further enhance that numbers I would need to attack the rent.
I started thinking about buying a trailer to live in. The first problem is, there is no trailer parking in my city. In fact, there is, but it is aimed at that highly rich people that want to spend only a weekend or a month feeling they are "in the woods". Highly expensive, more than my rent. I thought about buying a trailer and getting some other place to park. The problem in this case would be that the place should have some septic system, or I should build one. I had a good change of buying a little of land (1075 square feet), where I could park a trailer or build a tiny two-stories house. But what I really want is to live in some rural property, with more land than that, and grow most of my food. Then, if I were to spend money in that plot of land and in the trailer or house building, It would be hard to get that money back afterward. Because such small plot of land with a small house in it is not easy to sell here. So that maybe would not speed my path to ERE.
I had some offer of rural land in a place that was being split between the inheritors. There was even some piece of land that had a tiny house that I could live in. But that process of splitting the land was taking very long. In cases like this it can take years for everybody to agree on the splitting.
The place I was living is 2 miles from the city, where I work. Then I had an offer from a neighbor, to rent her house that was 5 miles from the city, surrounded by a forest, with water from a well and place to grow some vegetables. The thing is, not everybody wants to live much far from the city. And the houses were simple and small. There was two houses, an old one and a new one needing some finishing. The downside was, no Internet there. But it would be a great difference to me: my rent was get from 280 to 150 reais/month (1 dollar = 1.6 reais today). At least that was what I was expecting. And I could also practice more agriculture as I would have free water for irrigation. Then I thought about an even better deal. I offered to finish the unfinished house, buying all the materials needed. I would not want money for my job. But, in exchange, the owner would negotiate a smaller rent, to be covered by the costs of materials I would spend. Then I was planning to have something around 2 years of rent at 80 reais/month. The owner liked the proposal (before talking anything about prices). Then I went to research the costs of the materials. Then, before I even made a list of how much it would cost to finish that house, she started to say that she would want to charge me 200 reais/month on the new house, because she would charge 150 on the old house, and the new one would be better. And I was not gonna charge for my work!!! Then I saw that she would not be a good landlord and I gave up.
Then an uncle told me about a deal in a nearby city (8 miles from my job). I went there to see the house. There was some history behind that neighborhood. Some years ago, a man who have more than 300 acres of land and was completely alone, gay and without partner, decided that life wasn't worth. Then he hung up himself and left written that his land should be given to people without property. A lot of poor people received a plot there, and helping each other, a lot of simple houses were built. Lots of the persons also got even some materials for free, donated from someone. Then in less than 10 years a whole new neighborhood was born. As most of the people there spent nothing to buy the plots of land and most of them didn't even spent building the house, there is some very cheap land and houses there. I didn't like the house and location of land that my uncle showed me; but I discovered there was a lot more on sale there.
Then last weekend I rode my bike there looking all the houses with sales signs and asking people in the neighborhood. I ended up finding a house a liked that was on sale but had no sign in it. The old lady that lives on the other house told me about it. After asking a lot here and there I found the owner. I thought that, being hard to find and know about, maybe that could be a good deal. I came to know that the house, 236 square meters, had been built some three months ago; and that the owner just died. The new owners, his mother and two brothers, were wanting to sell. After doing some research on the owners, looking some more and trying to negotiate the price, Monday in the evening I decided to pay the very low price the seller was asking. Asked the boss to take a day out for that important reason. I got up Tuesday at 5h30 in the morning. Was in the city at 7h. Went to the city hall at 8h to do some final checking on the documents. At 8h30 I was knocking the owner's door. He woke up, I made the deal. At 9h10 we were all in the place where we signed the papers, with the bank being on the other side of the street. At 11h45 in the morning everything was done and the papers already have my name. The price? Not more than 2 and a half months of my wage (that is not low but not too high either). I will spend some more money on minor fixes (painting the walls and changing the floor - but in only 236 square meters that won't be much). The plot is 2900 square feet in size - if I build a rain water harvesting system I will be able to grow some vegetables. And there is an empty plot at one side, whose owner will maybe want to sell for less than 2 months of my wage. How is that for cheap housing? :-)
Then my savings rate jumped from 75% a month to 85% a month. My savings that would cover 60 months of my expenses now can support me through 75 months, despite my expending with the house. The numbers of years to Financial Independence that was around 6 years now is 3.2 years. Well, lets round that, 3.5 years. Good cashflow improvement, isn't it?
In the next day I woke up different. I never had a house, neither my mother or father did. I didn't know how it feels. I feel different now. More like a real person. More self-confident. I look in another way in people's eyes. I never know I would have such a feeling! Differently from the other people, I usually don't celebrate. Most of the time I see no reason for celebrating. I don't care about my birth date. I care about no date. But it's the first time I'm feeling I want to celebrate!!!
Now enough with searching for housing for sometime.