Nomadic-ERE Year 5 - Wanderlust Prevails

[2Birds1Stone]

My very short term (next 2 months) plans are mainly to enjoy the rest of fall to train for the 6 hour MTB race I signed up for, and build my running endurance back up, read for at least 1-2 hours per day, start selling junk before the big trip, and try to relax and figure out what skills/activities will get me through the cold dark winter days

[classical_Liberal]

Only two more weeks!!!

[thrifty++]

WOW you have shitloads of stash. That's a really nice position to be in. I think you can afford to relax a bit now like you are planning to do.

[classical_Liberal]

I've never lived on an amount this low, so it will be interesting to see how it plays out.

You may find lack of easy, large income a catalyst for some unexpected change in this realm. I had mentioned in my journal that I had an unusually long lame duck period. Where I knew FT employment was coming to an end on a specific date for almost 4 months beforehand, with a PT income plan already in place. It seemed like a mistake at the time. Now, coming out the other end, It was actually very helpful in that I had time to consider things like spending, where I was at Wheaton level wise, etc. I began making some changes in thought process and habits beforehand, preparing and mentally living with the idea of no income, hence am already beginning to see the results. In Q3 my spending dropped by more than 20% from the previous trailing 12-mo average. That's with nothing unusually low, as a matter of fact, I had some extra expenses associated with a major move. Only time will tell if this is a more permanent change, and honestly I can't quite place my finger on any specific changes.

[ajcoleman22]

Congratulations!

[Jin+Guice]

Wooooo! Congratulations!


Re: Spending Less

I'm not sure if you've listed this before, but I find it helpful to break down my budget like this:

Rent+Utilities+Groceries (absolute minimum): If you can't afford this you will be sunk in a month. There can be room for savings here, but it's unlikely to change immediately.

Necessary Travel (i.e. grocery shopping and not vacations): If you're going no car and not commuting to work this should go down drastically. It's potentially free or almost free (biking + walking), but if you're in NY you're probably paying for some sort of public transit?

Healthcare: I'm not sure how long this will hold, but if you are low income and in good health, it's possible to get free or almost free healthcare with obamacare/ medicaid. If you have a health expense that you require to live, then I'd put this in the top (absolute minimum) category.

Cell Phone: It's possible to do without this one, but I think most are unwilling. It'll probably be hard to get another job without a phone.

To me, this list represents minimum expenditures. How much are these costing you? Are they below your target? If they are, then what else are you spending $$ on? Is it worth working more for? Is there any room for potential savings in these categories now that you don't have to work?

On the flip side of this, how much was it costing you to work? Working is currently increasing my expenditures by at least 25%.

The quickest fix seems like it would be to sell your car, since there is usually a high fixed cost to having a car.

I apologize if you've thought of all of this already. This is just how works in my head, so I thought I'd share it with you.




As I'm always proselytizing, I think that not working or working very little is a categorically different life than working full-time. It takes some time to get used to. I'm interested to hear how your journey goes, how you fill the days and any insights you gain after your freedom from full-time work.

[2Birds1Stone]

@c_L, I'm sure lack of a paycheck will have me reevaluating spending priorities =)

@ajcoleman22, thanks!

@Thrifty++, took long enough to get here. Time to enjoy the fruits of the labor.

I am done with nearly all of my remaining work tasks. Final handover to a team mate this week, and mailing in my laptop on Friday.

Have some unpleasant personal stuff to deal with in the coming weeks. First thing, dental work. Since I'll be losing insurance till January, I want to take advantage of having good dental plan. I had a filling that recently fell out, so getting a new one put in this afternoon, along with a full dental exam. With my luck I'll need a ton of work done through the end of the month.......might as well use the full value and spend down my FSA while I have it. I've been traumatized by past experiences with dentists, so I'm REALLY not looking forward to this.

@J+G, thanks man. Your nudging definitely helped seal the deal

I used to post my individual spending broken down each month at a granular detail for a few years.

Averages
$550 - rent + utilities
$150 - groceries
$90 - health insurance
$75 - car insurance
$50 - gas
$35 - cell phone
$25 - gym
$25 - health/hygiene
$1,000/month total

Sure, I can and will get rid of the car before we start traveling. For now I enjoy the convenience and it's not costing all that much. I walk, eSkate, bike most places when the weather is nice. The car is used for visiting family (40 miles away), getting to trail heads that are 10+ miles away, and getting anywhere I need to go when the weather is absolute crap. The cheap healthcare is contingent on ACA being there, but for now has been employer subsidized. I made too much money in 2019 to qualify for any subsidies for remainder of 2019, so I will use c_L's trick re: COBRA.

Without any spending on hobbies, entertainment, leisure travel etc....nor any replacement costs for stuff I need/want, I can feasibly get by on $1,000/month without feeling deprived of anything. So even my $1,300 should feel luxurious once I can optimize it. The biggest thing though here, we are giving up this lifestyle to travel for a year, after which we will likely live in a new place, with new costs, and who knows what that will shape up to be. Returning to this area, finding a place to rent for as cheap as we do with all utilities included would be very difficult, and we've been really lucky in that regard. Renting in the same place for nearly 7 years with no increase in rent has been a blessing.

Working wasn't costing me all that much. Probably $20 in dry cleaning every three months or so, and some convenience food, a lil gas. I worked from home ~80% of the time, and the rest was mostly reimbursed by work. I also got a lot of travel rewards from the work travel, which were used to subsidize personal vacations. I won't miss it one bit, but from a cost perspective it was not bad. The largest cost was time and mental health, and those are the biggest things I want to take back.

[Jin+Guice]

Our budgets are not very different so I'm interested to know what luxuries you spend the rest on? The luxuries I blow money on are going out to eat occasionally, going to bars with friends occasionally and basically doing more of those two things when I'm on vacation for like 2-3 weeks every year. This fits inside $1,000/ month for me because I spend slightly less on groceries and have no car, gym membership or health and hygiene category. Minor changes but actually ~20% of the budget.

It also seems like you think this budget only exists in theory, but you just laid out how you could easily live on $12,000/ year... so why are you worried?

You live on Long Island, correct? It seems *almost* impossible that you could move somewhere more expensive.


Also I'm coming to NYC in November and now you have no excuse not to meetup with me .

[2Birds1Stone]

The discretionary spending categories vary wildly month to month and year to year........

Some big one-off purchases in the past 5 years have included a carbon fiber triathlon bicycle, a fat tire mountain bike, an e-skateboard, an engagement ring, an older sports luxury car, and most recently a laptop since I have to mail in the one I had for work at the end of the week.

Lumpy purchases that exceed $50 every year include race fees, and associated travel costs. The Ironman 70.3 I raced in 2017 was like $250 to enter + gas/tolls/lodging which I couldn't travel hack. Several Olympic distance destination races. Most recently the 6 hour endurance MTB race $105, which is in November, and I'm signing up for a 10 mile brewery run in January which is $55. Gifts are a pretty big one, and average out to ~$1k/yr across birthdays, holidays, weddings, etc. Weddings themselves, with two this year that I had to rent a specific tux for (was a groomsman/best man). I griped about the Tux rentals here, both were $200+!!!

We also like to go out once in a while, though typically for brunch/lunch/happy hour, and avoid expenses places or expensive multi course dinners. I don't do bars often anymore, cut that waaaay down in 2019. Used to hit a happy hour pretty much every week, now it's 1-2 x per month. We do buy good craft beer and occasionally cheap wine for home. Park/entrance fees, ranging from $5-10 a pop, and well worth the expense typically. Consumables for sports, such as replacing bicycle tires/tubes, drivetrain components, even padded shorts wear out with the amount of riding I do. I'm blessed with a dozen amazing MTB trails on Long Island, and there are several that require a 15+ mile drive in each direction. So there's extra gas for stuff like that. The odd piece of clothing I have to replace (can't seem to make a pair of sunglasses last more than a year). Costs for trips we take that are not hotel/flight (which we typically travel hack).

If an experience is not grossly overpriced (even by my frugal standards), and it means spending time with family/friends and creating some great memories once in a while, I try not to turn these down. They've included fishing trips on a party boat, doing wine tasting, booze cruise, theme park, etc. While rare, also end up ~$50 per person or so all in. Most of our socializing is however free. We host a ton of BBQ's, potlucks, and have gotten our friends in the habit of meeting for coffee, at a park, free beach etc.

Despite all of this for 2019 spending will come in <$18k, for 2018 it was $17.5k, 2017 was $24k, 2016 was $24.5k, and 2015 was $19k......that's as far back as my data goes. Prior to that I would wager around $24-30k/yr before I got serious about getting to FI, but I had a much lower income before 2015 ($40-50k gross a year).

ETA - get me dates ASAP! I would love to meet up......

[Jin+Guice]

So you spend 6k a year on sports stuff and dates? Why were 2016-2017 so much higher? I'm not trying to ERE shame you, I'm trying to get a handle on what you were worried about continuing working for, since you were FI on your baseline expenditures awhile ago.

There's an old blog post about becoming FI in certain things. If you have 33x whatever expense your FI in that thing. I've been thinking about making a semi-ERE one about only becoming FI in survival expenses. It just seems kind of crazy for present me to give up all this time now so future me can enjoy frivolous activities and expenditures. Make that fucking guy work for it if he wants it so bad.

You pointed this out to me in my journal, but the good thing about having and saving for the higher spending rate is that now you have room to cut back if shit goes south. You can also make 3-4k a year doing basically anything.


I don't have dates yet but I will let you know as soon as I do. It's definitely going to be in mid-November. I should know by this Monday at the latest. That train ticket is oppressive, it was only $14 from Westchester... a decade ago.

[2Birds1Stone]

If you want to generalize, then yes. ~$500/month on sports/hobbies, leisure travel, entertainment, gifts, and other lumpy expenses not outlined in the $1k/month budget a few posts above. 2016 and 2017 included more of those purchases, included said car, mountain bicycle, an out of pocket international trip to Poland that I couldn't travel hack due to travel date limitations, an engagement ring.....

I've been "barebones" FI for a while now, posted about it here quite a few times over the past several years. The thing is, those activities and hobbies are what I enjoy doing, so it was absolutely worth it to work two more years to be able to cover some of them without having to work. Additionally, they will make it worthwhile to work in the future. I can say without a doubt that there are things I want to be able to spend money on, which fall outside of the bare necessities category, and might look frivolous to someone whose values are different. That's why I like the idea of semi-ERE. I KNOW my wants/needs will change in the future. So far I've earned a lot of optionality. I'm cool with living on these spending levels at the current time, and in the near future. Maybe I decide to take up different hobbies, or desire a lifestyle in the future that costs more.....if the juice is worth the squeeze, then the worst thing that happens is going back to work for a bit here and there, or even FT for a few years. After all, I have ~30 years till traditional retirement age.

I've read the 33x blog post, and used it in some of my own thoughts and posts here dating a few years back. I like the concept a lot.

This week I had to go to the dentist, because I'm losing insurance at the end of the month. After xrays and a full exam, turns out I needed to get a cavity filled, and a crown redone on a root canal that was performed in 2014. Poof $450 gone just like that, even with insurance. These expenses are merely a blip on the radar when you have a larger buffer in the spending, if you're barebones, they eat up a much larger chunk of the budget. In 2012 I had surgery, and out of pocket cost was almost $4,000 (something ~$28,000 before insurance kicked in). These are inevitably going to happen in the future as well.

[slowtraveler]

A third of your budget is entertainment. That's wonderful. I could cut my budget by 33% as well if I stop eating out and travelling. But it improves my life so I keep my lifestyle unless a strong need to tighten down arises. The margin of safety provides slack to tighten should the need ever arise. The knowledge here is just another tool to improve our lives. It's more fun having some spenders who are closer to the median family instead of all freecycling and living off road kill.

We're still all on the blazing fast track to ERE here saving over 2/3 of our income. We're financial unicorns for achieving financial independence in under a decade. Good on you. Enjoy your life.

[2Birds1Stone]

@slowtraveler, yup! Quite a bit of financial slack in that budget. I could also alter activities to still be able to enjoy hobbies on a more limited basis while reducing the costs by say 50%, so it's not "all or nothing". While I could surely "get by" on $12k/yr, I live luxuriously on $18k/yr, which in these parts of the country/world is far below median spend. Median HH spend in my county in NY is ~$90K/YR for a 2.3 person HH. We are living on ~38% of that as a 2 person household.

I enjoyed the graphs posted in other threads by Jacob and Fish that show household spending vs. income and how it impacts timelines to FI. Going off the national average, we spend less than 65% of two person households, but earn(ed)* more than ~80% of households for the past 5 years. This combo has given us a huge leg up in our 20's and early 30's.

*our household income moving forward will be tiny with my recent shift to ERE =)

Definitely enjoying life! And have been throughout the process. Despite work having it's ups and downs, I feel like we've really been taking advantage of our relative freedom within society, geography, etc. I can look back on the past decade and smile, knowing that I did not slave away in a cubicle, wishing for some future date to be happy.

[Scott 2]

I've been "barebones" FI for a while now, posted about it here quite a few times over the past several years...So far I've earned a lot of optionality.

This a good description of my experience. I didn't appreciate it until I was there, but when you hit barebones FI, especially at ERE savings rates, a few more years has dramatic impact. You're at highest income levels from work, your money is working for you, and the option of an immediate exit limits stress. It's fun to try risky strategies someone scared of losing their job would never attempt.

[classical_Liberal]

@2B1S
last day?!

re spending:
I think there are a bunch of "intangibles" related to work spending. Second and third order effects we don't realize until it's either removed, or we spend a great deal of time analyzing the situation.

I always wondered why people calculated the "barebones" financial numbers. Why does that really matter if that's not what you're actually spending? Now that I've been trying to figure out higher Wheaton level stuff, it seems more important. Because we should identify what "head tax" type of spending actually is in our currect situation, and what things could be worked into a better system.

You guys should move to the midwest, because my "barebones" expenses are:
$275 rent/utilities/internet
$25 cell (plan+extra for occasional phone replacement)
$100 Transport (currently as a car, could easily replace with other)
$150 food
$125 Health Ins + occasional healthcare spending
$675

This is my monthly "nut" if I had no entertainment or travel costs, never got seriously ill, cracked the whip on grocery spending, and decided not to replace my car when it suffers critical failure of some kind. Crazy. I've never actually put this to paper (or pixels) before. On a good month I spend double that, on a bad month triple. October will be a bad month because I'm a week into a three week vacation.

[Scott 2]

For me - bare bones expenses was extremely interesting, when I viewed FIRE as a goal to be achieved. I'm a minmaxer by nature, making ERE math a perfect fit. I had to reach that arbitrary line in the sand, to understand it was a naive strategy and not what I wanted.

I do think someone that recognizes that early can make smarter choices on their path.

[2Birds1Stone]

Hey c_L!

Yup, last day. Goodbye email sent, mailing in my laptop, badge, and accessories on Monday. This last week was basically a few hours of transition and making sure I closed any open loops or had someone else assigned to them.

So it sounds like your budget is almost identical to mine except for the housing. I'm not entirely sure I would want to move to the midwest to save $275/month on rent. I've never been to the midwest besides a few days in Chicago and Columbus for work. It's going to be a large part of our year long van-life experiment, and I look forward to checking out many of the states, national parks, and cities/towns to see how we like it.

Longer term, we plan on snowbirding. The midwest might be a place we spend some summers in. Winters will be spent either in FL (SO has a ton of family in the Tampa area), or in SE Asia. We also want to check out Mexico and Central/South America eventually.

I think there are many more rural areas on the east coast that have cheap housing too, as long as you get at least 100 miles away from the ocean. Heck, in Citrus County FL, you can rent an entire house for $500/month.

A much more important criteria for where we live will be access to things we want to do. I plan on doing a whole lot of MTB, SUPing, hiking, cycling, and would love to get back into snowboarding. So if there are places in the midwest that are near smaller cities with good cultural scene, and activities, that are also close to these outdoor activities, I will have to spend some time in them to see how they vibe. I know Colorado checks a lot of our boxes, but the prices have gotten quite crazy over the past decade. We're going to be fairly nomadic over the next 3-4 years. Between world travel through spring of 2021, an AT Thru hike in summer of 2021, and exploring the USA by van all of 2022, things will change and costs/life may look quite different. Any who knows what we will want to do in 3 years =D, for now it's just a cool thought experiment.

[ItsALongStory]

My take on barebones number crunching is to drive home the point of optionality, for people to realize that they are already independent from a basic needs perspective. I would hope nobody sets that as the end goal but rather an important milestone to take a mini-retirement or let passion become more of a driving factor in your professional decision making vs dollars.

Reading all of these blogs has given me so much more gratitude and excitement for what's to come. The culture I grew up in is not nearly as much of a workaholic culture as the US but there is a lot of stigma around losing a job. Western Europe has a ton of unions and more employee-favoring legislation so for companies it's a lot more difficult to get rid of people. I know two examples first hand where someone was fired and hid it from their SO for fear of shaming and did that for months on end to the point where she was depleting her personal savings that was earmarked for a house down payment for example. It set in motion this cycle of lying and deceit that pretty quickly resulted in separation and lengthy depression for the girl in question.

[ItsALongStory]

A much more important criteria for where we live will be access to things we want to do. I plan on doing a whole lot of MTB, SUPing, hiking, cycling, and would love to get back into snowboarding. So if there are places in the midwest that are near smaller cities with good cultural scene, and activities, that are also close to these outdoor activities, I will have to spend some time in them to see how they vibe.

Northern Nevada also checks many of these boxes but has some affordability concerns similar to Colorado. Taxes are lower but not really a factor at your spending levels.

[2Birds1Stone]

@Scott, exactly. When I was early in my FI journey, getting to a point where traditional 4% WR touted by MMM covered my housing/utilities, it was an interesting feeling, but didn't make much of a difference in my day to day. As the number covered food, healthcare, and other bare necessities, suddenly it made me take career risks and negotiate for things harder than I would have if I were reliant on a job to survive.

@c_L, I think it's about courage. Having your barebone expenses covered using an individually comfortable SWR provides you mental freedom, at least it did for me. I was no longer scared of getting fired, managed to "Office Space" it for nearly two years, and take bigger risks while letting the stache grow. . I accept the fact that I will either need to earn a lil side cash, or use a slightly higher WR in the future. I think it's important to put those pixels/pen to paper and figure it out. Fantastic knowing that you can get by on that little amount. Do you want to? Probably not, but you could do it, and then earn the money for the non necessities with a VERY PT or seasonal job. Having both, the barebones, and some luxuries covered by 3%, plus having the option of PT/seasonal work is eating your cake and having it to. Maybe too conservative for some, but an approach that makes me feel good about giving up some seriously high income right now, and 0 anxiety about it*