Later Retirement Extreme -Earned Income Resilience/Shelter Expense

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7Wannabe5
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Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Sat Jul 29, 2017 1:44 pm

As I mentioned elsewhere, I am currently re-reading the book for the 3rd or 4th time. Different bits are striking me as more or less relevant now that my personal experiment with midlife lifestyle re-design is a bit further along.

From the chapter "A Renaissance Lifestyle":
The strategy described in this chapter focuses on living inexpensively in a culture dedicated to extravagance, productivity, and material waste. It follows these guidelines:
...

-Work for the purpose of earning money for no more than five years of your life or five hours a week.
And under sub-topic of "Shelter"
I think that a good guideline per person for living arrangements is $200-$350/month/person or about 10-15% of your net salary...As far as I'm concerned, the percentage is absolute. If I want to live in a "nicer place" it simply translates into a smaller place.
Since I am relatively old, financially frugal, but apparently irredeemably time-thrift (person who has tendency to cash-in free time earned through frugality as quickly as possible),the possibility of working 5 hours/week (or some flexible variation on this formula, maybe 6 months @10 hours/6 months at 0 hours, etc.) for the rest of my life starting RIGHT NOW! is much more appealing than working 0 hours/week for the rest of my life starting after 5 years of full-time employment.

Since I did read "YMOYL" and "The Tightwad Gazette" around 25 years ago, I only worked full-time for about 6-8 years, but I basically used that money (not very much since I was primarily employed as manager of large bookstore) to help raise 2 kids to adulthood with frugal version of aspirational class amenities (lovely-in-decay historic home, decent schools, ballet lessons, soccer uniforms, stacks of books, fresh vegetables etc. )

Anyways, although I am in no way considering the metrics above as some sort of safety net stamped with guarantee, I was curious to examine the implications, both generally and in relationship to my specific situation. My own experience leads me to believe that the most critical factors to consider are the difference in expected hourly wage for full-time,locked-down employment vs. part-time, flexible employment and some measure that will equate the risk of a plan that primarily relies on robustness vs. one that primarily relies on resilience. When considering failure of a primarily robust plan, it makes sense to compensate for this risk with something referred to as an EMERGENCY! fund, but when considering failure of a primarily resilient plan, it makes more sense to compensate for this risk with something referred to as stash, roll, pump-prime, or transitional funds.

I think a measure of earned income resilience risk would have to look something like 1/SUM over the number of problems you can solve multiplied by factors of customers/clients/employers needing each particular problem solved multiplied by factors of markets in which trade/contract can be facilitated and average time lag of exchange for each market, multiplied by expected earnings/hour for solving that problem. (perhaps some redundancy here)

Once this problem was solved, you would still have to address the degree of independent risk of expenses increasing, which could also be ameliorated through plan either more robust or more resilient. Since shelter is likely to be the largest expense in most situations, if we accept 5 hours (or less)/week as maximum, which is 20% of 40 hour work week, for which shelter is to be estimated as 12.5% of total, this would result in shelter expense representing approximately 62.5% of budget in 5 hour work week solution. Therefore, it is obviously very important that the solution for shelter be either very robust, very resilient or both.

Okay, so let's examine worst case scenario in which the only problem an individual is capable of solving in exchange for money is the gathering and recycling for deposit of beverage cans dumped roadside. The client/market/transition factors are negligible, because the job is more or less always available, and some market is always open, so perhaps amounting to 1/2 hour of 5 hour work week spent walking to store and depositing cans into machine. The work itself averages 20 cans/hr., so total weekly earnings of 4.5 ($2) = $9 with fairly low risk of not being able to earn this amount. However, this individual is now faced with the challenge of coming up with a robust and/or resilient shelter solution which will only cost approximately $5.62/week. If we set acceptable risk of failure at 5% then this individual must either come up with one shelter solution which is 95% secure (robust) or, perhaps, 4 or 5 shelter solutions each of which is independently 50% secure, available at that price or less in total. Since, as Jacob noted elsewhere in the book, in an affluent society security is one quality that is likely to be over-priced, it seems likely that the resilient solution should be more frugal.

So, if we take an individual such as myself who is reasonably assured of always being able to obtain flexible, part-time earned income solving several different problems at bottom rate of approximately $15/hour with minimal transition time in a variety of markets, this would result in minimum monthly earned income, given maximum average of 5 hour work week, of approximately $325 requiring solution of monthly shelter at price of approximately $203. Most of the solutions I can come up with for this problem involve some level of barter of service. For instance, I could easily trade part-time nanny assets/skills for free accommodations. Some of the solutions I can come up with, such as long-term rough camping in National Forest, would limit access to earned income markets. Can any of you brainstorm some other solutions that would not require de facto barter employment or severely limit solutions to minimum earned income? I am thinking that a set of solution sets that changes with the seasons, like a cool temperate climate wardrobe, will be most ideal.

Laura Ingalls
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by Laura Ingalls » Sat Jul 29, 2017 6:47 pm

I don't know I just rely on the resilience I get from living in a cheap paid for house and a handy SO. A modest maintenance budget, property taxes taxes, and homeowners insurance equal about 360 of work yearly at $12 an hour job or just 180 hours per adult. Or it takes about $100,000 at a 4% withdrawal rate. Seems pretty minimal for a place out of the cold. I also have the opportunity cost of the money I took out of the market to buy said house. Given how that had been in the past two years since buying the house it is a really loss. Still seems way less painful than paying $900 per month to live in the meh apartments down the street.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by P_K » Sat Jul 29, 2017 10:20 pm

The solution I currently have planned for the shelter problem is along the same lines as Laura Ingalls. I’ve looked into the price of building a tiny house or purchasing one and have determined that a budget of ~$37k to build or ~$60k to purchase, inclusive, ought to be sufficient. Assuming property tax, insurance, and maintenance run 1.85% total, and the home is valued at ~$60k in either case, the total monthly outflow of monies to support it is: (60,000 * 0.0185)/12 = $92.50.† This fits your price requirement but most likely fails your minimum earned income requirement – unless you can find a populated city with tiny house friendly zoning and reasonable property tax rates. It also adds the burden of home maintenance which may or may not be a first order effect you deem acceptable. And of course there is the requirement of having and being able to spend the $60k required for the purchase of such a property.

†Adding in the opportunity cost of the money spent to build/purchase brings the monthly cost up to: (37,000 * 0.03)/12 + 92.50 = $185 if building or (60,000 * 0.03)/12 + 92.50 = $242.50 if purchasing – assuming a 3% ROI is achievable for you. I wasn’t sure how applicable this was however as you seemed more concerned with meeting present cash outflow requirements with earned income than being concerned with the total actual cost of housing.

I have not yet reached the stage where I have implemented this solution, however, so I cannot speak to the feasibility from experience – which hopefully does not render this whole post useless =P. Presently I am solving the shelter problem by renting a relatively cheap apartment with a roommate. I pay $285 per month. If SO moved in it would drop to $142.50/month/person which fits your expense requirement and more adequately fits into your minimum earned income requirement. From my understanding you tend to avoid living with SO’s so perhaps a solution of cheap rental with several roommates is a more suitable solution?

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7Wannabe5
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Sun Jul 30, 2017 10:31 am

@Laura Ingalls

Based on the excerpts, silly equation, and exercise I indicated above, I am considering starting from scratch with only:

OPTION A: Work for ONLY 5 years (20% of standard 40 years), 40 hours/week, 80% savings/investment rate. Then extreme retire forever with lifestyle spending = SWR X (these acccumulated savings.)

OPTION B: Work for ONLY 5 hours/week (20% of standard 40 hours)= immediate extreme semi-retirement forever.


Since I am already 52, but in good health, the 40 years in OPTION A can be regarded as roughly equivalent to the "forever" in OPTION B. Therefore, absent desire to leave financial legacy to my heirs, B is the more appealing option. Especially, given that I believe there is very good likelihood that I will be eligible to collect Social Security benefit that is above the minimum (due to many (38?)years of part-time and/or self-employment), but not enough above the minimum to be at risk barring complete collapse of U.S economy. Even the minimum benefit of approximately $6000/year is significantly greater than (52 X $15 X 5) =$3900=OPTION B earned income, yet significantly less than defined poverty level. So, if I can come up with resilient solution (happy, thriving) to OPTION B for the next 10 years, I will also consequently have come up with rather robust solution for my last 30 years.

So, if I want to acquire outright ownership of a home under the terms of OPTION B, I suppose I would have to construct it piecemeal from reclaimed materials (currently available in abundance), using only extra funds available in my yearly shelter budget of $2436 and application of sweat towards equity. The property tax rate in the realm of my urban garden lots is rather high, so I would also likely have to plan on rental income from some part of code-minimum footprint of 800 square ft. I think maximum occupation rate would be 5 humans. So, not an insignificant challenge, but do-able in theory.

@P_K:

I was informed in very direct language by code-enforcement official that I can't live in my camper on my urban-garden lots, and there is nowhere nearby where I can legally park my camper at reasonable rate. The code in the northern realm where my BF recently purchased wooded acreage is much less restrictive, so I am selling my camper to him.

The three major sticky (somewhat dependent) factors in coming up with resilient solution to OPTION B are:

1) Minimal earned income options
2) Shelter expense
3) Transportation expense

Any improvement to any one of these tends towards worsening the other two, with exception being solutions that include some amount of service-in-barter to mitigate shelter expense, which might be a bit of a cheat on the 5 hour maximum. Argument could be made one way or the other depending on exact circumstances.

SOME SOLUTIONS I HAVE BRAINSTORMED THUS FAR (success = 5 reasonably independent, yet possibly concurrent solutions which I find appealing, each with failure risk of less than 50%-total annual holding and/or exercising of option expense less than $2436 total and non-abnegation of (1) and (3) )

1) Piecemeal code-compliant eco-tech home build on garden-site. Downside: Extremely ambitious. No possibility of current occupation.

2) Purchase at auction and renovation of existing decrepit foreclosure near garden-site. Downside: Extremely ambitious. Ticking code-clock time constraint will likely break proposed budget.

3) Live with my mother for free in luxurious apartment in one of the best small cities to live in anywhere in exchange for minor assistance with her mobility issues. Earn social credit with my sisters for taking on their share of the Mom-problem for the time being. Downside: Ticking clock on being driven insane.

4) Live in my former-camper on my former BF's wooded acreage in lovely northern rural/resort area. Downside: Former vs. current status of relationship remains ambiguous. Possibility of no availability of part-time local employment and/or internet signal strong enough for distance employment. Documented bear sightings in area and report by former owner that "something moved a large bag full of sugar beets, a deer can't do that, a raccoon can't do that..."

5) Contact the yacht-guy and see if he still likes me enough to extend offer to live/sail on his boat for free. Downside: Sun-damage to skin. Cabin fever. Final fall from grace to overt career as aging-sugar-baby resulting in social shaming.

6) Advertise myself as being available for position as part-time travel nanny in exchange for travel-expense/lodging. Downside: Might be difficult to limit terms of employment. Might be fired if I am discovered in bed with cute Grandpa when he visits.

7) House/garden sitter/tender. Downside: Variable and unknown effects on (1) and (2) combined with likely frequent need for transitional solutions.

8) Live in van or similar. Downside: Opportunity cost of funds to purchase. Increased transportation expense. Some likely negative influences on (1)

9) Volunteer for Americorps for position doing something like being the librarian who drives the bookmobile that serves low-income rural inhabitants of Vermont. Downside: Good deal of work required, although status is technically volunteer.

10) Woolf volunteer for large permaculture project. Downside: Same as Americorps.

11) Rough camp in tent in National Forest. Downside: Extreme limitations to (1.) Cold weather and bears.

12) Live in low-rent youth hostel near my garden-lots. Downside: I am not a youth, and the fact that I am always the one who cleans the kitchen will likely not save me from being rendered extremely unpopular due to expressing my opinion on the correlation between pot-smoking and erectile dysfunction.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by slowtraveler » Sun Jul 30, 2017 2:21 pm

I recall you mentioning you want to approach life from more of a mid 20's male perspective. Here's a few ideas:

1) Find a BLM free space and build an earth home out of recycled materials and earth. Use a special router to get your internet if particularly remote.

2) Through hike 6 months of the year, house sit 6 months of the year.

3) Start a business-either online or leverage pay per hour. ie-find out when demand is strongest for dog sitting and take care of many dogs for a few hours. 10 dogs at $5/hr each is $50/hr or plant sit for money for multiple houses and do daily rounds. Only limited by creativity and marketing skills.

4) Work from computer and get nice airbnb abroad for $10-$15 a night while practicing Spanish, Thai, or some other cool language.

Some ideas on your list:
3) Not worth it. I've felt my own sanity slowly drained to save in this manner.

6) If grandpa belongs to the nanny's family, you could be welcomed in rather than ostracized for taking caring of grandpa. Isn't caring for the elderly an option too? I've heard it pays better.

9) Peace corps too. These both contradict your desire for only 5 hrs/wk. They pay sub 10k per year. If you're putting this much work in, might as well get more than 20k savings for 2 years of work.

11) Weather is warmer in the south, you can migrate with seasons. Bear spray and bear canisters stop bears. If you do a well hiked trail there will be a lot of company, check out the Pacific Crest Trail and Appalachian Trail (not in winter for either) for some ideas of well hiked trails with most resupply stops in under 100 miles of distance.

12) Do you have a citation? I've only heard this from war on drugs people, never seen it in a scientific article.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by Laura Ingalls » Sun Jul 30, 2017 8:26 pm

7wannabe5

I really think it is in your best interest to work til you reach the first bend point of SS (the length of time it takes is not important). I would also argue that you need change your time frame for collecting from 62 the 70. Since delaying SS is the best deal in this town and if IRCC you have a family history of longevity.

I think we live in a culture that undervalues resiliency and creative thought which you have in spades but I think the utility of plain old more money increases as other forms of capital diminish with age. I also have found that "fun" post ER jobs are more fun when you are not worried about an wolf or bear at the door. I also think working "forever " is hubris. The closest I knew to that was my DH's grandfather that was the maintenance guy at the nursing home down the street until about three years before he became a resident. I am quite certain he would have preferred to quit sooner. I also think early dementia got him fired as he he spoke too freely.
Last edited by Laura Ingalls on Sun Jul 30, 2017 9:56 pm, edited 2 times in total.

classical_Liberal
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by classical_Liberal » Sun Jul 30, 2017 9:00 pm

@7WB5
I think about these things regularly myself and try to convince myself of taking my version of "OPTION B". The problem, there are many advantages to "OPTION A", or at least a mix of the two, starting with "A". Once some financial capital is at one's disposal, it can be used to leverage oneself into a better position for the future. Once up front "buy in" costs for a particular lifestyle are available, so are more options.

I'm just going to throw this out there... maybe you just need to bite the bullet and save some financial capital. However, it's probably less than you think.

If you can truly live of off the 5 hrs week @$15 hour ($325 a month). This is your greatest asset. For comparison, the median household income in the US is about 56K for a household size of 2.5. This means, roughly, the median US citizen requires (56K/2.5) *.9 = 21K per year (10 percent for payroll and income taxes). Using a 4% WR this means you have an asset worth 17k*25= 425k compared to median. That's a pretty impressive combination of other forms of capital, which will remain resilient with a relative high degree of certainty, at least until Social Security age.

Regarding SS, it (or some system similar to it) is robust and will remain in place. Perhaps a discussion for another thread, but, I believe, it will remain solvent for the remainder of your (and my) life. The odds of getting 100% of promised is low, but the odds of receiving less than 50 percent of promised benefits is equally low. Although there may be changes to the system, someone with low level financial assets at the "traditional" retirement age will see benefits from the system to a great degree of certainty. It would literally take the complete dissolution of the US government for abandonment of that system. The elderly are just too large of a voting block and no one wants to have see their grandmother living in the street, nor do they want to have to pay for her directly. This is a good combination for SS. I place the likelihood of the end of the U.S. in the next few decades much lower than the end of my life due to aging and medical risk factors (particularly if society collapses and with it the modern health care system). So for the purposes of this discussion let's assume you will get at least 2/3's of promised benefit. Plus, you have the added insurance (capital) of having raised two children whose prime earning age will coincide with your traditional retirement age. IOW, if society collapses; SS, your children's earning power, and modern health care along with it, your statistical actuarial lifespan will decrease in multiples as well, more than canceling the financial risk.

This means that basic lifestyle costs ($325 mo) are assured (from a statistical standpoint of death being more likely than failure of SS) from age 67 onward. This leaves less than 15 years to fund basic costs. Assuming zero real returns, 60K is enough of a nest egg to cover all of your expenses for 15 years. If you set a goal to accumulated this amount of financial capital in the most efficient, yet tolerable way, I would venture to guess a period of 12-24 mos would be required. At some point you will likely take on additional earnings, even if it's just collecting aluminum cans to clean up the neighborhood. This will further solidify your financial capital causing you to have saved in excess (along with a high likelihood of greater than net zero returns, help from children, and more than 50% of SS payout).

Regarding housing, a plethora of additional opportunities will present themselves if you are independent from work (FI with 60K) and/or have the ability to use part of your financial capital to "buy-in" to more upfront cost intensive housing situations.

I honestly envy your situation! Currently my ERE skills/other capital skills have a hard time even maintaining at the median level set forth above. If I could reach a skill set worth half yours (212.5K or net cash outflow reduction of 8.5K per year), I would be ERE in a similar time-frame of 12-24 months. However, I find it very difficult to focus on those skills when a) I spent so much life energy accumulating financial capital and b) much of my cash outflows are based on perceived needs due to a lack of energy/requirement to maintain the schedule and appearances associated with earning said financial capital. IOW, perhaps we would both benefit from building a better option for rotted-wooden leg of our stool vs continually trying reinforce or change the legs made of titanium composite.

I am having a hard time knowing how to proceed in the exact opposite fashion you are. The grass is always greener on the other side.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by OTCW » Sun Jul 30, 2017 10:01 pm

If was in your position, I'd live in the camper at the BF's land, get the highest paying job I could find and work as many hours as I could with the goal of accumulating 100k as fast as possible. Buy a cheap house for 60k or so in a low cost of living area. Live off of the remaining 40k (spend it down, so don't worry about investing it in anything other than cash instruments), supplement with 5 hr work weeks, and get to social security age.

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7Wannabe5
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Mon Jul 31, 2017 1:18 pm

Felipe said: I recall you mentioning you want to approach life from more of a mid 20's male perspective.
Eh, I was just having a moment of feeling trapped. Overall, I think it is much better to be a mid 50's female, except I would kind of like to be able to do bike stunts. However, I do very much appreciate your suggestions.

1)Not a huge fan of western U.S. landscape. Much prefer water and trees.
2) Like, but would prefer to break year up into more varied pieces.
3) Interesting concept. Previously considered baby-walking service. In Canada there are people who take the elderly out for fresh air rides in bicycle powered carts.
4) I am already on my way to having multiple platforms on which I can offer tutoring online from anyplace I have decent internet service. I have qualifications necessary to tutor ESL/U.S. elementary common core to very young students, math to intermediate students, and test prep to older students.


Re (3)- Unfortunately, my mother is near teetering on the brink of no longer being able to live independently due to her mobility issues. Also, I can't leave her alone to deal with the problem of my second sister currently either suffering from severe mental illness and/or something more Valley of the Dolls. I DEFINITELY do not plan on staying here indefinitely, but I am tentatively estimating after the holidays for next new move.

Re (12)-Might just be correlation. Likely alcohol is worse. Possible only eating white food is worse. Might be genetic.

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Riggerjack
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by Riggerjack » Mon Jul 31, 2017 4:36 pm

See section 3102 of your building code. Membrane structure.

If you can't combine a tent and a haxayurt to solve your problem, you aren't being very creative. Way nicer than camper living.

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7Wannabe5
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Mon Jul 31, 2017 4:40 pm

@classical_Liberal:

I don't think I could live on $3900/year AND work enough to save (after taxes etc.) $30,000/year. Also, I think working that much would be bad for my current happiness and my current and future health. Based on my previous exercises in tracking my happiness levels and spending tendencies, "working for money" at least a little bit, actually offers some benefits, mostly social, beyond the money earned, but this definitely tops out and then falls with quick decline around 16 hours/week.

I played around with the numbers a bit and it's looking more like:

$179-Shelter and Transportation
$48-Food
$8-Girl Stuff/Clothes/Grooming
$49-Health
$32-Communications/Entertainment
$8-Misc.

I have kept to this range in each of these categories at times, but never all off them at the same time. So, will be a challenge. I've actually only spent an average of around $300/year on health expenses over the last 4 years, but I am willing to spend as much as $500-$600/year. My deductible is much higher than this, so out-of-pocket = actual , to the extent that there is anything "actual" about healthcare pricing these-a-days. In general, I am willing to make do with the type of medical care generally available circa 1958 when Americans were happiest. I lumped Shelter and Transportation together since they have a great deal of dependency.

Also, 2/3 of my estimated early withdrawal at 62 Social Security would still be more than $325/month, and I highly doubt the 1/3 reduction at that level.

However, it's not really these sort of details that matter. It's less about skills and more about perspective.
Laura Ingalls wrote: I also think working "forever " is hubris.
I agree if you are considering the standard 40 hour work week. I disagree if you are considering a 5 hour work week. Might as well be dead if I can't work 5 hours/week at something and the more resilient I make my plan, the more somethings I will be able to do.

@OTCW: The more I consider it, the less I want to be tied down to house purchase, unless it is something I can easily and flexibly rent out to others (which would obviously be yet another de facto part-time job as landlady.)

My recent experiences with serious fail of outsourcing storage of my rare book inventory to Amazon and living in my camper on permaculture site, have even caused me to start considering a philosophy or practice or pattern-model that takes into better account the fact that fruit trees do not move and humans do. I already located two apple trees growing within walking distance of my new domicile, and next weekend I am going to start exploring my BF-ish-person's wild acreage with him and swim at the beach. I would not be free to do that if I was working some horrible 40 hour week job for money like almost everybody else :lol:

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Mon Jul 31, 2017 4:52 pm

@Riggerjack:

I very much like your suggestion, but I fear that the code officials will find some way to keep me from doing that too. Also, I would have to figure out some way to secure the structure since not a very safe neighborhood. Maybe if I submitted design for potential (perhaps mythical) eco-tech residence that would meet code, and then camped out to guard build site? Something like that?

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by Riggerjack » Mon Jul 31, 2017 9:26 pm

Your permit for your theoretical eco dome, would blow your budget for the whole project. Just finishing my basement was over $2600 in permits.

You mentioned having an engineer BF. I don't read journals, so I don't know what his status is. But having him stamp your designs is the short, sweet trip thru the planning Dept. But go with your designs, no flat roofed tents!

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by Eureka » Tue Aug 01, 2017 1:49 am

@7w5, have you considered writing Easy Readers for preschool/first graders? My uncle (also former school teacher and good at telling stories) did. Once you have the grab of it, you can easily write a book in 5 hours: 'Tom gets a puppy', 'Tom goes to the beach', 'Tom gets a new friend' or whatever. There will be an initial period where you need to support yourself with other means (or just take a loan or get a prepayment from a publisher), but once you have a few books out, you will soon have a decent income from your 5-hour work week.

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7Wannabe5
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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Tue Aug 01, 2017 9:46 am

@Riggerjack:

I do need to do some more research into this option. My previous experience with such matters has been in the realm of major renovation in a variety of locations, but not new build. It seems to me that the requirements, costs and level of enforcement in the small city within large city where my garden-lots are located is way out of alignment with the value and observed average maintenance standards of the properties. Whether or not the process would completely blow budget would depend on how long I could draw out each phase of the build and/or wait out the cycle of politics/bureaucracy in quest for more favorable treatment and/or some other factors such as figuring out how to get urban-farm grant.

My BF-ish-person knows that I love my garden and would really like to see my project out to completion, but he wouldn't even want to spend the night in the neighborhood, so he is not terribly interested in offering support. He is more interested in having me assist him with low impact development of his wooded acreage. Also, my former lover is still my partner/caretaker on the urban project, so a bit messy. Recent experience has informed me that although it is possible to simultaneously maintain open and overt relationships with several Silverbacks, bringing them together on the same piece of turf is not a very good idea, no matter how civilized any of them claim to be.

@Eureka: Thanks for the suggestion! In years past, my definition of success was more like "stay self-employed forever", so I did consider some similar concepts in alignment with my rare book dealing business. In particular, I considered writing easy reader books on non-fiction topics that would appeal to aspirational class parents and grandparents. So, I will let you guys know when my picture book on the topic of Stoicism written at 4 year old rhyme and rhythm reading level is available for purchase at the low, low, low, special just for you guys price of $14.99 ;) Maybe "Marcus and the Marshmallow" and/or "Eat Those Peas or On Your Knees" ...


*************************************************

Anyways, although it was my own personal problem matrix that caused me to re-read the book at this juncture, I was trying to expand upon or explore the general topic of the alternate path to ERE success (OPTION B)that is less often chosen on this forum. I have also been attempting to comprehend perma-culture and related topic of basic common human patterns ( "gathering around the hearth", "scanning for food or danger", "seclusion of female for purposes of mating") in recent years. So, my perspective has become that creating a living map that indicates actual paths of behaviors, resource flows, stocks and conduits/connections is the necessary task at the Wheaton Level of Systems Analysis.

The sort of debates we commonly engage in on this forum are indicative of tension to resolve at this level. "What should humans eat?", "Is it better to homestead or travel?", "Pair-bond or remain single?", etc. The majority of the members of this forum are highly functional humans, who can solve many problems in many different ways. If I was offered the choice between finding myself stranded in any situation where money was not a helpful tool with my choice of 5 random humans vs. 5 random members of this forum, I would not have to consider the matter for half a second. So, how is this overall level of capability to be measured?

I think "The Tightwad Gazette" might be the first place I read about the practice of performing the exercise which calculates how much you are paying yourself for doing something for yourself rather than outsourcing. For instance, if you spend an hour reviewing your Time/Life Home Repair manual, walk down to the corner hardware store with $2.99 in your pocket, and fix that dripping faucet yourself with pre-tax savings rather than post-tax earnings, you might be effectively paying yourself $60/hour. So, it is a relatively easy early exercise in frugality to try to learn how to do all of these sorts of tasks down to the level of your Real Hourly Marginal Wage on the Market. If your situation is that you are also simultaneously undertaking some major task such as caring for your young children, your (Market Wage Minus Day Care Expense) might be so low that it would be sensible to expand these tasks down to the level of sub-minimum wage. This was my situation circa 1991. However, if you are somebody with a high hourly marginal wage on the market and no major expenses like daycare, and your primary goal is to accumulate stock of invested capital as efficiently as possible, you will only favor in-sourcing tasks for which you can pay yourself effective wage greater than or equal to your marginal market wage. So, the efficient solution is in direct conflict with the resilient solution, but this can only be seen if marginal market wage within context of specific actual domain (zones surrounding where you actually wake up in morning) and range of activity, flow of resources (internal or external to any zone including zone 00 -the skin you are in) determined by transport, trade and communication options.

EXAMPLE:

Zone Center: Camper parked in outback of off-the-grid northern wooded rural acreage.
Estimated Cash Income Possibilities:
1)Transport by hike out of woods followed by bicycle on rural highway to substitute teach at school building 5-10 miles away. Arrange for some kind of ride-share in winter. WAGE: $100 minus overhead of maintenance of phone signal/7 hour day plus commute time. Risk of loss or unavailability of employment: Low. Factors: Competition, Failure of modern cellular phone system, Failure of physical ability to hike/bike. Weather conditions precluding ability to hike/bike.

2) Hike out of woods followed by bicycle on rural highway to cafe with strong WiFi to tutor online through variety of sites/employers. Risk of loss or unavailability of employment: Low. Factors: Competition, Failure of Local Nodes Internet, Failure of physical ability to hike/bike, weather conditions precluding ability to hike/bike.

3) Gather natural materials, package and market as craft supplies through several internet based outlets. Risk to Income: Demand, competition, internet failure, physical ability, weather.

The shared dependencies of these solutions within this context would obviously leave me vulnerable if I broke my leg, or the internet/cellular network collapsed. So, I should strive to come up with a couple more possible solutions that would allow me to continue to earn income even if there was a blizzard of the century or an unexpectedly high supply of people qualified to substitute teach in the region, etc. etc. Obviously, continued passive sales of delightful picture book on the topic of Stoicism might work. HOWEVER, there would also always be all the other sets of solutions that would be available simply by relocating myself to a new center of Zone 0. Perspective of Book of Maps, rather than single Map, rather than linear function or Path.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by classical_Liberal » Tue Aug 01, 2017 8:53 pm

@7WB5

Regarding personal cost vs outsourcing, it is important to look at the future value of acquired knowledge and skills. At first, the time cost of learning to fix a leaky facet may be high, but once the skill is learned it is learned for life. Hence a new resilient skill is present, not only to increase efficiency (decrease personal life energy cost) of future leaks, but also as a marketable/barterable skill to trade with others in the event other stool legs fail. As a person who outsources too much, I regularly have to remind myself of this benefit.

Secondly, it is important to put value on life satisfaction. For some, certain activities are pleasurable and the work/play continuum becomes blurred. If a person enjoys learning to and actually fixing plumbing; is there any true life energy "cost" involved in this activity at all? I would argue choosing activities that are pleasurable, or less miserable take significantly less life energy. From a financial standpoint, If once can earn $500 for a day of misery, $100 for a day of "ho hum" neutral activities, or $25 for a day of energy-creating inspired activities; which activity has the most life energy to dollar costs?

Your thoughts on shard dependencies/risk management are important. I agree most of the forum is very focused on "Option A" and this is where a great deal of discussion takes place, particularly mitigating risk/increasing resiliency of an "Option A" choice matrix. As I mature and gain ground in Wheaton levels, I begin to see more and more wisdom in a mixed approach. However, as you have pointed out, utilizing an "Option B" only choice matrix has inherent risks of it's own.

I would again urge you to consider some form of mixed options. If working to save 60K in a short period of time is too much like a day of misery for $500, perhaps considering a slow burn process to save financial capital is in order. Generally speaking, those who have chosen "Option A", tend to move on to "option B" after achieving some level of FU/FI, hedging their bets. Choosing "Option B", without any financial capital or at least a plan for a slow burn version of accumulating some capital will leave you open to more risk. OTOH, maybe I am simply trying to justify my current situation which is much closer to a day of misery for $500 than a day of pleasure for $25?

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by Laura Ingalls » Tue Aug 01, 2017 9:39 pm

Classic liberal we do think alike on this topic. You are more eloquent than I am.

I tend to think in terms of my future self. My evening self appreciates that my morning self put beans in the crockpot. My Sunday self appreciates that Saturday self went to yoga. My 25 year old self was disappointed that 22 year old self couldn't figure out how to do grad school without debt. My 48 year old self doesn't much care anymore as my 31 year old self took care of it. I do not think my 48 year old self needs to work herself to poor health or stress but I am chill with her doing something fun to have some structure and reducing the tail risk to her 90 year old self.

I suspect that 7wb5 is wired less anxious than myself (most are :( ) but I do think that the not having a bit of financial backstop is a stressor.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Wed Aug 02, 2017 9:39 am

@classical_Liberal@Laura Ingalls:

First off, I would note that I agree with most of what you wrote. Let's further explore the suggestion you made that I should either quickly or more slowly choose to accumulate a cash buffer of $60,000. I do agree that I should have some amount of cash buffer, and I am currently liquidating/auctioning off the remains of my rare book inventory with that in mind, and also because I am not currently interested in being tied down with storage/shipping obligations of dealer, although I may continue to earn some money as a quick-flip book scout. I do not yet know what my net proceeds of business dissolution plus current cash fund will total, but it will definitely be less than $60,000.

If we go back to OPTION A vs. OPTION B, and assume that my marginal hourly wage would be the approximately the same whether working full-time or part-time (in my case this is likely valid assumption), and would net average around $15/hr., and I was able to live happily or thrive upon approximately $3900/yr. then after approximately 5 years of full-time employment with approximately 75-80% savings rate, I should have accumulated approximately enough funds($130,000) to allow safe withdrawal of this income (lifestyle spend allowance) as semi-passively managed (2 hours/month labor forward?) investment proceeds ad infinitum, no matter what my current age might be.

I believe that we also agree that setting my lifespan at another 40 years would be simultaneously optimistic, yet conservative according to actuarial tables. So, if we divide the theoretical $130,000 I might have accumulated 5 years from now by the 35 years that will then be remaining of my lifespan, the result is $3714/year, which is only ($3900-$3714)=$186/year less than my projected safe withdrawal of semi-passive investment income/capital over those years. Ergo, if 2 hours/month is a reasonable estimate of time devoted to management of investments then I will have spent (35X52X5)=8320 of my remaining hours/units of life energy (vigor) on the creation of a means of self-employment (being my own conservative investment manager) that will with high probability of success provide me with $186/(12*2)=24 hours of employment/year at pay rate of approximately $7.75/hour AND/OR a simple cash savings fund that provides no net interest income and totals $130,000. Please correct my math if I did something wrong here.

Obviously, similar line of reasoning could apply to your suggestion that I either quickly accumulate approximately around half this amount ($60,000) or, perhaps, accumulate half the amount over the course of 5 years, by either working more than 5 hours, but less than 40, or at some form of employment more enjoyable/otherwise beneficial, but paying even less that approximately $15/hr. So, since I am not particularly interested in the opportunity to earn $7.75/hour as my own personal investment manager, what is left to consider is to what extent I should favor shifting work hours off of the back of future me and on to the back of current me, the possibility of better opportunities for investment of 8320 hours of my remaining life-energy (vigor-time) over the next 5 years, and what amount of cash reserves would provide an appropriate emergency/transition/roll/slush fund?

Given the above, and assumption that I will continue to work for money 5 hours/week until I fall over in my compost pile when I am 92, we can first devote the entirety of my social security benefit to slack or emergency fund. Even if I find it necessary to exercise this option early (age 62), my estimated benefit will be over $600month, and over $1000/month if I wait until 67. I think we can agree that $600/month would provide significant slack to a proposed spending budget of $325/month. Since it is also my intent to "start from scratch" with this option/exercise, the entire proceeds of the liquidation of my inventory/current cash fund will also be available as emergency/slush/transition/roll until I achieve the age of 62 (9.5 years from now.)

So, there are two risks, or possibilities, that might lead to FAIL!!! :lol: that would have to be either covered by cash fund, or the horrific to consider option ;) that I would have to work more than 5 hours/week some time during the next 9.5 years. Either I am not able to consistently average cash spending below $325/month or I am not able to obtain/maintain an average of 5 hours work/week that will pay me approximately $15/hr. or some combination of both. Mostly going to have to be a matter of "proof in the pudding", but I think there is some value, and also amusement for me, in considering web of resilient support for these risks. As in, constructing 5 plans for feeding myself on less than $2/day, 5 plans for earning $15/hr if/when stranded in a blizzard, etc. etc. etc.

The last few years, since I've no longer been responsible for financial support of my kids, I've been semi-retired (working around 16 hours/week @$15/hr.) earning and living on around $10,000 year, give or take for investment of capital in permaculture project and withdrawal of capital from rare book inventory. This has been very easy for me compared to the years when I was feeding a family of 4 on $40/week, so I've been slacking off in a number of different ways. I want to invest my life-energy/time-vigor in a variety of way that will both benefit future me and improve lifestyle of current me, I just don't think More Paid Work Towards Stock Market Investment is my best or should be my primary option.

If we assume, that at age 52, I still have 40 hours/week of vigor-time at my disposal (doubtful), I would suggest that the obvious first investment of vigor-time towards likely peak benefit to future me would be in the realm of health/fitness, because most likely to give me greater benefit of increased vigor at the margin, than I would receive from financial investment in the stock market. IOW, it is my rational estimate that if Current Me makes choice to devote 10 hours/week directly to Health/Fitness out of the 40 I might have chosen to invest in work-for-money, Future Me will derive much greater benefit overall, and in particular regard to ability to still be able to work-for-money 5 hours/week at age 72, 82 or even 92. If you agree, we are down to 30 hours left for work-for-pay.

There are a variety of factors that contribute to an individual's marginal hourly effective wage on the market. Resilience of the wage at any level would depend on variety/number of skills/markets, and level of wage would depend more on degree of mastery of any specialized skill/solution set. So, life-energy devoted to education/practice towards either competence in greater variety of skills/solutions or greater mastery of particular skills/solutions would tend towards both insuring or increasing ability to earn adequate income working only 5 hours/week. So, let's devote 10 hours/week of life-energy to continuing education/practice. If you agree, we are down to 20 hours left for work-for-pay.

Frugality itself is a skill/art that requires education and practice and vigor-time. As I stated previously, I don't believe that I could live on $3900/year if I also had to work 40 hours/week. So, let's assign 10 hours/week to the expanded practice of frugality. Since I am the sort of person who likes the challenge of doing something from ground level scratch, like the guy in the video clip that Jacob posted who grew, baked, fermented, slaughtered all the components of a sandwich himself, I could even go so far as to devote 20 hours to this, even if I only ended up paying myself 20 cents/hour at the margin, because it is fun!!! So, that takes us down to somewhere between 10 and 0 hours/week left for work-for-pay. Let's call it at 5 hours, because I do not have enough vigor-time at my disposal to live on effective wage of 20 cents/hour doing everything for myself from scratch, and there is some sort of onerous minimum head-tax exerted by society, and it has been my experience that I do derive some marginal pleasure/benefit beyond cashe from engaging in a small amount of work-for-pay.

Please let me know if you think the line of reason I outlined above went wrong-minded at some juncture :)

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by classical_Liberal » Wed Aug 02, 2017 12:40 pm

@7WB5
I think you are going to do what you want to do, no matter what I write! :lol: This is why i like you!

I do have some quibbles (by quibbles I mean fundamental disagreements :D ) with your numbers. For example, if you happened to save 130K, I believe a semi passive investment portfolio would yield a CAGR of at least 4% over a 40 year timeframe. 130K*.04= $5200 a year (tax free at your income levels under current code). This a $216/hr at two hours a month.

However, if it takes five years of the majority of your productive time to "buy-in" to the part time employment of personal semi-passive investment manager, I understand your hesitancy, even with such a high hourly wage at the conclusion of your efforts. I get that you WANT to spend 5 hrs a week yielding that $15/hr for the remainder of your life. I'm the same way. As a result of that, i am positive that 130K is vast overkill, particularly considering SS. Which is why I had originally thrown out the 60K number. I would venture to guess, even that amount is overkill in your particular situation. However, i can not express enough the nontangibile effects of having at least some financial capital at your disposal. As the world is today, having a financial capital buffer will likely leverage many, if not all of your other efforts in ways that are difficult to predict/know. There is serendipitous opportunity value in being able to pay for a concrete slab at an urban permaculture site (as opposed to scrapping the whole idea and a year of work) when local zoning officals become a PITA at exactly the wrong time in your personal life.

Again, no matter what you do, the ability to thrive on less than 4K a year of cash outflows is far and away your largest asset. I'm sure you can make any plan successful and i look forward to decades of reading about your adventures in doing so. IMHO, a plan which includes some amount of "Option A", along with your obvious preference for "Option B" will be more robust.

Edit: For the record i do agree "frugality" and designing effective systems flows takes life effort and time. This is part of the reason I have failed to move much below the median US citizen level of cash outflows. Personally, I spend too little effort on these and too much effort/life energy on generating financial capital. Unfortunately, (or fortunately?) I am in the middle of an S-curve in "Option A" and have at least ten more months in the upsurge of that curve before I can consider reevaluation my efforts without jumping off too soon. At that time, I very well may put more effort into systems flows and frugality, then attempt to design an "Option B" that covers whatever costs I fail to design out of my system.

Regarding health. There is no better investment as we age, I consider any amount of time spent on this activity as having the greatest ROI, even at the far right of the S-curve. Again, my actions and beliefs in this realm are not currently aligned due to devoting too much time to financial capital accumulation.

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Re: Later Retirement Extreme -Earned Income Resilience/Shelter Expense

Post by 7Wannabe5 » Wed Aug 02, 2017 2:27 pm

classical_Liberal wrote: However, i can not express enough the nontangibile effects of having at least some financial capital at your disposal. As the world is today, having a financial capital buffer will likely leverage many, if not all of your other efforts in ways that are difficult to predict/know. There is serendipitous opportunity value in being able to pay for a concrete slab at an urban permaculture site (as opposed to scrapping the whole idea and a year of work) when local zoning officals become a PITA at exactly the wrong time in your personal life.
I don't disagree as matter of general principle. However, it wasn't lack of a spare $1000 that caused me to cotton-ball my project. Pouring the slab would have been a step towards allowing me to continue to park my camper on my property, but I was told point blank by officials that I can not live in my camper. Two separate issues. I decided not to pour the slab because it's not worth total of $1800 to just have option to use camper as tool shed, with even some possibility remaining that wouldn't be allowed. I plan on continuing to carry the overhead of the project until/unless I determine there is no way I can make it offer some yield as investment as opposed to cost as hobby.

Also, the primary reason with a bullet, exclamation mark and underscore, I did not choose to find other residence near my garden is I am still dealing, reeling with the trauma that my sister who was my former business partner, my recent housemate, and one of my lifelong best friends has become a completely irrational, delusional frightening person who thinks that I am one of her enemies. I simply do not have the gonads of steel that would be necessary to simultaneously rough primitive camp solo in a gritty, city neighborhood and potentially leave myself open to interaction with somebody I love who is currently intermittently paranoid delusional. I mean there are horror movie level things that could potentially go wrong in that situation.

So, I am really like a super-trooper to already be optimistically planning forward again (pats self on back.) Part of where I am coming from with my magnetic draw to OPTION B is that I did the mental exercise where you choose what you would do if there were no limiting factors or restrictions of any kind put upon you, and I immediately went to "Check myself into a spa retreat." , and then because I am almost reflexively frugal, I asked myself "How can you create your own spa retreat for you?"

Anyways, I know that there is always investment opportunity cost in choosing to not have some greater amount of liquid funds available. For instance, when I was an active book dealer, there were times when I could have bought many more books at a profit when a library was unloading. If a handicapper gave me a tip I could throw more money at a pony and then buy myself a pretty new red dress. If I had as much money as my multi-millionaire friend then I too could participate in IPOs. If I had $60,000 in the bank, then I could throw it down if I happened upon a good deal on the foreclosure auction real estate market. If I didn't have $100 in the bank I might not be able to fill the freezer with chicken when I saw it on sale for .29/lb. Maybe there is a rational formula or rule of thumb for ratio of liquid roll/lifestyle-expense? I think it would have to have to do with whether you could swing a better deal with cash upfront than you are currently getting with cash/sweat flow?

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