I confess my ERE heresy

Maus · Post by **Maus** » Sat Apr 27, 2013 6:23 am

OK. I just bought a house for $250K. It's 1550 sq. ft. -- not a McMansion but not exactly a tiny house either.
I still intend to "retire" in 4 years, but my SWR just bumped back up from 3% to 4%. I spin this as controlling for inflation in my housing sector.
On the plus side, there is a half-finished in-law addition that can be developed into an income property and a huge pool of mild-mannered bible college students seeking rentals.
Am I cast out for my purchase?

bulgaria · Post by **bulgaria** » Sat Apr 27, 2013 6:38 am

I doubt that you will be cast out

Are you still working or already fully retired?

bluejoey · Post by **bluejoey** » Sat Apr 27, 2013 6:42 am

I think there's some flexibility here. DW and I are on the mildly ER spectrum (I'm a full-blooded ERE type by nature but my marriage comes first), but that doesn't mean we can't post here. Our house is smaller than yours, but still definitely out of the tiny house range. Congrats on the purchase : D

Maus · Post by **Maus** » Sat Apr 27, 2013 6:45 am

@bulgaria

Still working. I haven't posted much recently, but forum denizens might recall that I relocated once again to a government job to spike my pension. My intention is to work for about three more years to effectively double my pension at age 55. There is an outside chance that within the year I'll be promoted to a position that would treble the pension. But that would reset the three-year clock. Fortunately, I am thoroughly enjoying my new job; so I have zero regrets about delaying ERE, at least at present.

bulgaria · Post by **bulgaria** » Sat Apr 27, 2013 6:50 am

Then I also would say: congratulations with your new house

GPMagnus · Post by **GPMagnus** » Sat Apr 27, 2013 9:17 am

We are turning the other cheek Maus

J_ · Post by J_ » Sat Apr 27, 2013 9:50 am

Yes Maus, you have gone too far, and doubling or tripling sounds also a little bit overdone.
But I hope you enjoy your new home, and doing work that you like ànd earning well is (after a second pondering) not against ere.
So stay and send now and than a message how you are doing!

Dragline · Post by **Dragline** » Sat Apr 27, 2013 1:55 pm

Well, I certainly won't be throwing any stones in your direction.
Congrats on the dwelling. Hope it works out well for you.

pooablo · Post by **pooablo** » Sat Apr 27, 2013 3:19 pm

Hehe, $250K sounds like a bargain compared to some of the housing prices to some of the major Canadian cities in Canada!
That 1,550 square foot house would be at least $400K in my hometown.

George the original one · Sat Apr 27, 2013 3:23 pm

Congratulations, you're not getting voted off the island that easily!
(now slinking away to do yardwork on my other house)

secretwealth · Post by **secretwealth** » Sat Apr 27, 2013 4:05 pm

Now I don't feel so bad for doing the same--and my SWR is yours squared.
Remember that a 4% SWR still has an 82% success rate (or did according to one study), so I wouldn't lose too much sleep over the purchase. Plus, 2008 notwithstanding, real estate is an appreciating asset.

llorona · Post by **llorona** » Sat Apr 27, 2013 7:23 pm

Congrats on the house! You've got to live somewhere, so you might as well like where you live.

chenda · Post by **chenda** » Sat Apr 27, 2013 8:38 pm

Nothing wrong with that maus, enjoy

where I live a house that size would cost at least $750000, so don't feel bad

dot_com_vet · Post by **dot_com_vet** » Sat Apr 27, 2013 9:00 pm

Here in rust belt county, 1500 sq ft. would still be considered small, so no worries. Plus it can be income producing, sounds smart to me.

KevinW · Post by **KevinW** » Mon Apr 29, 2013 6:08 am

DW and I bought a townhouse in that price ballpark so I can't throw stones. Frankly it's a big setback to ERE -- that much capital could support one ERE person --- so I consider us on an ER path vs. ERE. This was one area we just didn't want to scale back very much. I think as long as you make these kinds of decisions fully aware of the consequences and with open eyes, it's fine. You can still be "extreme" in other areas.

Maus · Post by **Maus** » Mon Apr 29, 2013 7:40 am

I appreciate the feedback. Escrow opens tomorrow, and I remain excited about the possibilities of this deal.

JohnnyH · Post by **JohnnyH** » Mon Apr 29, 2013 2:50 pm

I cast thee out!!!

https://www.youtube.com/watch?v=XzDpQubfmpM
Actually seems cheap for CA, and adding the income property (that hopefully will require minimal permitting/inspection) sounds like it might be an excellent deal.

secretwealth · Post by **secretwealth** » Mon Apr 29, 2013 3:02 pm

For the record: the board rightly chastised me for wanting to buy a second house a few months ago. However, the profits from renting out my first home have already covered its maintenance/tax costs for 2013, and I could have rented it more to cover the costs of the second home if I'd wanted to.
If you can make your lifestyle inflation pay for itself, I say go for it.