Rural Kiwi's Journal

[Rural Kiwi]

Greetings from sunny (mostly) New Zealand!
Any kiwi's out there??

I'm a twenty year old male living the country life with a goal of being 'retired' by thirty. I define retired by having money that allows you options. Having options is freedom! Monetarily this means $350k for FI and $500k for retirement. But I'm only at the very beginning of my journey so hopefully this will be a great place to unload, get feedback and make a few terrible puns. So please let the constructive criticism, thoughts and puns flow

I am currently studying a degree in farming which has huge demand in NZ and a highly technical area. I love the mix of science, business and of course being outside in NZ's beautiful environment. I finish university in June and am currently in a summer job that pays well (for a summer job) until Feb. I'll be looking to invest in the rural community as I can see many opportunities, I haven't seen much of this around the forums so if anyone out there is doing something similar please say hi!


Finances
Debts
$45k Student loan - at 0% if working in NZ with compulsory repayments. This goes to 5.5% if I leave NZ so this needs to be paid off before overseas work (If I want to?).

Assets
$1k road bike - my transportation, exercise and favourite possession.
$0.5k Tramping (what hiking is called in NZ) equipment.
$0.1 checking account - Having such a small amount discourages spending.
$2.5k emergency fund at 3.5% interest - aiming for 5k by feb.
$1.5k Kiwisaver (super) - for company contributions. Can be used to buy first house.

Budget (over summer)
+$2500 per month
-$720 for board including food and all utilities.
-$20 pre pay phone
-$10 skype credit (any other suggestions so I can call grandparents overseas?)
-$200 other

This budget was achieved in November with a ~62% savings rate, but December got a bit out of hand with friends/family visiting every weekend and spent $600 in the 'other' category, including a weekend of drinking and buying some lovely german girls a round of beer. Oh well, it has been a really fun month but with only a 45% savings rate.

Hobbies
Road Cycling 2/5
Currently ride to work Mon-Fri for one hour per day. There is a nice bunch ride on Sundays I try to go to but am not too fussed if I want to skip it for something else. I find it gets me passively fit and doesn't take much longer than driving. Hopefully I can maintain this once uni starts again. Would only rate myself 2/5 as mostly riding a commute doesn't compare to longer/aggressive training rides. I am healthy but not fit, could benefit from cutting down body fat and increasing cardiovascular fitness.
Tramping 2/5
I don't get to go out into the hills much, mostly due to uni stress even though it is amazing to help me unwind. Need to do this more I have all the gear and know about clubs, I just don't get out there. Technically I know what to do, I just need to do it more.
Flexibility 2/5
I am trying to do ten minutes stretching/yoga a day. Just started this though and not very consistent yet.
Strength 3/5
I work in a job doing some heavy lifting so that helps and newly decided to do twenty minutes a day of body weight exercises.. will see how this goes.
Cooking and Brewing 4/5
Vegetarian since birth and loving it. I can cook well and know what to eat, cheese is my main weakness, followed by alcohol and then chocolate. I like brewing my own beer and cider but would like to learn about winemaking. Could always improve my cooking skills and love learning fancy techniques but it is not something I actively try to improve as I'm happy where I'm at now
Languages 2/5
Learning Spanish and am at a beginner/intermediate level. Will try to do 45 minutes a day on Duolingo.


Anyway... I'll try to keep you updated on how my financial and other skills are going. Ask away

[henrik]

Enjoy the habit forming. We'll be watching!

[Rural Kiwi]

Enjoy the habit forming. We'll be watching!

Thanks Henrik!

The first week of habit forming went ok but not fantastic. I am really enjoying learning Spanish and have been consistently excited for my daily learning. Stretching is also going well. I pansied out of biking to work a few times this week and got a lift with a colleague, but I will improve this next week. Strength training was the worst and only did one session this week - body weight exercises use more connecting/stabilising muscles than I am used so I am quite weak which then causes a mental barrier. No excuses, I'll have to force myself to do it as I know the benefits are worth it.

I am loving the format of completing the stretching, strength, biking and language Monday to Friday then leaving weekends free to do anything I would like, it feels like I accomplish so much more in a work day. I also like the fact that these tasks can be completed anywhere in the world and I'm not tied to a specific location (for gym or classes ect, although the cycling would have to be replaced with running), this fits in with my goals for a nomadic lifestyle for some time after FI. Being an ENTP, I have too many ideas that I focus on at once and this has taken some considerable time to condense it down to these activities. I have spent too long trying to do everything, feeling stressed to fit things in and not progressing. There are somethings that will have to wait until retirement, such as learning bass guitar, and I'm ok with this although it has taken a while to come to that realisation.

My summer job is located in a region I've never visited before which makes it an exciting three month trip. I fell in love with the region straight away and enjoy exploring it on my bike but I haven't made any friends since I arrived in mid November. I have been lucky to have friends and family visit from other regions on weekends as I try to put a lot of thoughtful effort into maintaining these relationships and enjoy being the social organiser between multiple friend groups. Suddenly having lots of time alone has been a experience and I'm learning to get energy from within, maybe something I can take once I move back to uni. Sometimes I feel great about this, at other points such as my first new years in a empty house it wasn't so great. ASIDE: But hey, I finished the whole series of band of brothers! I hadn't watched this since I was a kid, this time I saw it with a completely different perspective and was quite moved.

On the finances front I have 3 goals to be completed by the end of February:
1. $5000 in an emergency fund ($2500 already)
2. $500 bond for housing, will be returned in July.
3. $500 for passports ect.

I realise this probably isn't a very interesting journal for finances since I'm only just beginning and won't be earning much until later in the year. But you have to start somewhere, and I'm glad to be in this mindset now instead of later in life.

[Rural Kiwi]

Finances are going smoothly, I have a system and have completed a goal to pay for my bond/summer rent.

I realised I wrongly allocated my bike and tramping gear to assets when they are actually liabilities - I spent $100 on new tires and back light, but they were the first repairs in three years so for my primary transportation not too bad.

I've decided to travel to Europe for two months in late June after my last exams. This will provide an opportunity to see family I haven't seen in over ten years and also sick grandparents. I think this is an ideal time for a break before I start working and settle down while I try to reach FI. Estimated expenses are $5000 but it will be worth it. I'll only be traveling with a carry on backpack (learnt the mistake of a large bag on my last trip) and plan to walk the camino frances. It should be fun, I've been wanting to do some long distance walking for a while, but as I've been learning Spanish it will be a great time for that mostly.

I now miss it if I don't bike to and from work each day, fitness has improved as well as the benefits of it waking me up and the feeling of accomplishing more. stretching/calisthenics probably happen only three times a week. This as well as food intake is the next goal in this area

Work is going well, I'm really enjoying it and learnt so much about my field (pun intended, since I am in a rural job). I enjoy going to work everyday! I also like building relationships with farmers and walking around their farm. Sometimes I have a hard time knowing if I am being a good worker, due to the lack of feedback from bosses and often feel out of place due to being twenty in a job where all other workers are at least forty, including most of the customers. I probably have a lot to learn about the subtleties about acting professional. This has got me quite down at times, questioning my value as a worker in this job. Have you felt like this when first starting out working? Thankfully one workmate has become a mentor to some extent and is coaching/encouraging me to continue working for the company after university. I've started the discussion with management...

Having some thoughts about buying a campervan for living in permanently. Lots of tourists travel NZ all year around this way, and for the $3000 start up costs it is definitely cheaper than renting. This would give me transportation and also allow me to save faster for a mortgage downpayment. My only worries would be finding and hanging out with friends when I live in a one person van. Not the best of social situations, especially since after feeling alone for most of this summer I know I am extroverted (but one on one, not crowds). This wouldn't be a problem while at uni, but if I moved to a new town for work in August where I know nobody (entirely possible), it could cause problems. Overall I still think this is a good plan and am on the hunt.

I've decided on an investing strategy for when I start working. When thinking about stocks or bonds, I always came back to thinking, but I could buy a house with the money instead. And this is where my passion lies, so I think I should go with it, as well as NZ property generally being stable and very rental investor friendly as well as having tax benefits. Being inspired by the likes of FIFIGHTER's blog I am looking to find five cash flowing buy and hold forever rentals on traditional mortgages in two different geographic areas and niches. I'll get interest only mortgages to accelerate the purchases, then snowball the cash flow into paying off the mortgages one by one. I think this provides a safe and secure investment with higher cashflow which I can then turn to other forms of investing if I wish. I'd like to hear criticism to this strategy if you have any please! Being young at only twenty, appreciation is just a side topping on the cake.

[skintstudent]

Hi Rural Kiwi. You live in a beautiful country - I'm a bit jealous! Be very wary of using examples from the US as models for property investment. I don't think NZ experienced the drop in prices that happened in the US, and like the UK it remains a very highly priced market.
Good luck in your journey.

[Rural Kiwi]

Thanks for your words of caution skint student, I'll do more research.

Haha, this should be the official ERE superhero

http://9gag.com/gag/aypgOLY

[Rural Kiwi]

I would just like to say thanks to this frugal community for getting inside of my brain: today at work my body craved sugar in the hour after lunch, my work sells hard boiled sweets and chocolate covered almonds because of a christmas promotion. Instead of fulfilling my want the frugal voice of the combined forums jumped into my head before I even considered actually buying them I did the following, all thanks to you guys!

1) How much time would I need to work for this want (including paying taxes)? 20 minutes.
2) If I did a similar purchase once a week, how much time would I have to work in a year to pay for it? 17.33 hours (over two days!!)
3) Will this help my fitness goals? (Important in ere) 1000 empty calories... NO
4) Waited
5) An hour later when visiting an orchard I ate a ripe apple and peach from off the tree

So thank you, for making frugal principles start to become habit

[Rural Kiwi]

January 2015 Report

Income 2800
Expenses 1170
Savings rate 58%

Two one off expenses dropped my savings rate; 150 deposit to hold a flat for uni and 100 on bike parts. Still pretty happy with this months effort, fitness has improved, Spanish progressing and routine sorted.

Goals for February:
Book Europe trip
Minimise possessions
After university work decisions
Settle into uni routine

January expenses (please offer feedback):
720 rent
150 rent deposit
60 bike tire
50 bike light
20 phone credit
23 wine
12 oil for work boots
4 sweets
2 toothpaste
137 weekend friend visited

[Rural Kiwi]

Strong Will. The factor that allows you to follow through the logical processes you have already designed. I want to eat a filling, balanced diet to increase health, energy, mobility and appearance, yet I easily fall into eating sweets when stressed. Strength exercises have many benefits that align with my goals, but why is it hard to do them? Putting off tasks only creates more stress in the future, yet I still stare at youtube videos. I realise from past experience coffee affects my mood and sleep, positively in the short term but negatively in the long term. I think this is the crux of the matter - training to follow through for the long term benefits.

Later this year I will start my post-university job. Dream job, couldn't ask for a better place. The salary will open new doors in terms of living options - the plan is to live in a small converted van and thankfully New Zealand is accepting of freedom camping. This should maximise savings and I hope to save 85% after tax which is a huge goal. Van hunt currently in progress so watch this space!

Homesteading is something I have seen done but would like some ere input on please (this means comments people ) Due to my farming background I would be comfortable being able to grow all my own food even though it would be a huge task. But it has some pro's and con's. The plan would be to save enough while living in the van to buy at least 2 flat hectares, 1 Ha for cropping (oats, wheat, corn, veges) 0.5Ha as pasture and 0.5 Ha of orchard/woodlot. Then having 1 dairy cow and ~10 chickens. An old small tractor with rotary hoe would be ideal. Build my own small house from wood on site.

From a systems perspective it's very geared for safety. I would have control over my food, water and shelter source. Psychologically I need a grand challenge, something to do in the environment and this could be it. The downsides is the high investment that yields relatively little, since my food expenses are only ~$150 per month and when you take into account land, machinery, tools and inputs it would be a money sink until it was set up correctly. So this is my question - is it more ere to have almost complete control over your inputs (food, water and shelter), or generate more outputs (investments). The answer to this question determines if I homestead on my way to financial independence or afterwards.

I'm turning twenty one soon, I don't feel that old. I need to think on what I have really done with my life thus far...

[George the original one]

For meat, rabbits are easier to keep/use than chickens. If you just want eggs, then chickens are the obvious choice. A dairy cow will need more grazing land than you're planning on unless you bring in hay and will produce about a gazillion gallons more milk than a family can use and will absolutely tie you to a milking schedule. A handful of dairy goats will live on the pasture you're suggesting and probably produce about as much as you desire.

You're probably overestimating how much wood a tree will yield unless you're thinking in terms of 80+ year old trees. Especially if it is cut for lumber. For firewood purposes, you'll need about 1 hectare per cord of wood harvested annually (sorry, don't know metric equivalent for cord).

On the positive side, if you just want to meet your grocery needs, that can be done with a relatively small amount of land. Usual estimates are in the 200 sq meter ballpark for two people. Learning how/when to rotate the plantings and extending the growing season is the hard part.

[Rural Kiwi]

Thanks George, I don't eat meat so chickens are ideal for eggs. Diary cow would be for cheese too. I love cheese and could e
at a lot, so id see it as a bonus of excess being locked into milking is a downside, but relief milkers are common in nz. pasture is pretty productive here, but maybe a hectare is more realistic like you said. And winters aren't too bad so maybe a hectare or larger woodlot would be better. Still three hectares seems manageable. I would also have at least two bee hives and a source of water

[Rural Kiwi]

February Update

Income
$2283

Expenses
Total - $760

Rent - $470
Food - $144
Alcohol - $91
Phone - $20
Haircut - $20
Fees - $15

66% Savings Rate

Life
Had a good albeit changeable month on expenses. Moved into a flat for uni, going well. I'm busy giving to charity a lot of possessions I don't use. Even though I've thrown out quite a bit (I didn't have too much to begin with), I'm finding it hard to throw away stuff that is used infrequently BUT is very useful when I do use it. Eg. gloves for skiing.
Alcohol was the expense I could have easily cut back on, but I am going to enjoy my last semester at uni. I think I will miss the parties once I start working in a more remote area. I did however find a friend who makes their own spirits and I will put on a batch of beer
I was cutting my own hair for over a year, but I got sick of my plain haircuts. So for twenty dollars I'm happy with a style I couldn't have done by myself.
I've booked flights to Europe for the summer to visit family, I'm very excited. Taking six weeks off after uni to destress and celebrate.
Starting to make advances into dating for the first time in two years... and am unsure on this topic. I have the confidence to talk with women and ask them out (which I am grateful for) but I feel I'm being very straight up about it and kinda awkward. I find helping the conversation to flow hard at times. Basically I don't know how to flirt well or read body language. Studying body language and being more thoughtful in choice of conversation may help, as previously I didn't place much benefit on these two as I would start second guessing myself and thinking the worst. Any suggestions on good books about body language?

[GeoffK]

Hi Rural Kiwi. Yes there are other kiwis on the forum, me and one member known as George (but not the prolific George The Orginal One, or George The Other One) that I know about.

I'm further down the ERE path than you. In fact I am ERed. More or less. Though I'm a lot older.

You asked for some advice soooo...

Real estate as an investment in NZ. While not as bad as Australia - unless you count Auckland - NZ values are pretty high. I own four properties; a lifestyle block and 3 houses in cities I haven't seen a real value increase in these in about 5 or 6 years. A lot of places in NZ have stagnated (long term) even while Christchurch (where George lives in a quake damaged house) and Auckland have risen. Your stratagey of buying on interest only is best when house prices are fast appreciating. It contains a lot of risk when there is a potential bubble - eg Auckand which I read was the third most overvalued housing market in the world.

If you do buy a lifestyle block or land one day I'd advise going off the beaten path somewhat. I bought in West Otago which is less hot in summer and milder in winter than central Otago yet Central land prices are a lot dearer.

As for the minimalism - It may pay to question why you're doing it and whether you're doing it for it's own sake. I do it as well but it's costly when you get rid of something you may need and have to buy it in a few years - eg T shirts when you wear through the five you have. Of course if you live in a van you'll probably have to do it a lot but maybe you can get free storage for some things like at your parents place?

As for the strong will - will power seems to be an expendable commodity maybe you should google habbit forming.

Lastly I come from a rural background as well. My parents had a sheep farm and was a vegetarian too for many years. Now I eat seafood too. I've worked on dairy farms and I think you're way underestimating how much milk a modern dairy produces if you think one person can comsume it with milk and cheese etc. On the bright side, if you get one you'll have a valuable commodity to barter with neighbours etc perhaps for the silage to feed it

[Rural Kiwi]

Hi Rural Kiwi. Yes there are other kiwis on the forum

Hi GeoffK! It's good to hear from someone further down the track and thank you for your advice
I would avoid Auckland and Christchurch markets for sure, who knows when the crash is coming. I've been having changing thoughts about real estate and think I should focus on building some diversified index funds, cash positions and an emergency fund first. Good idea to buy land a bit out of the way, maybe I could commute into town for my job and stealth van camp during the week.
I've had to become very minimal as I've moved into my van, but kept some of the better items in a friends shed until I can transport them to my parents.
Milk galore! Good thing I love dairy foods and your it would be a good idea to barter it.

The big change has been starting to live in my van, it's been great so far! It gives me a sense of resourcefulness and freedom, downsides are no internet, boring food as cooking facilities are hard in a such a small van and I wish it was a bit stealthier. Since I managed to get it so cheaply, it will reduce my monthly spending significantly.

[Rural Kiwi]

March Update
Income
$1245.96

Expenses
$2461.11

Last paycheck, back at uni. Got interested in style and bought an awesome three piece suit and extras by op shopping. I now get some compliments which feels great, but bad month for money

April Update
Income
$750

Expenses
$944.32

A few clothing purchases too many

May Update
Income
$820

Expenses
$2132.90

This shows I spend and eat fast food when not feeling 100%. Also bought some flights and insurance for upcoming Europe trip.
Van living didn't work out, it was quite lonely and missed an office space for uni assignments, I would still use it for travelling and think it was great though, I can't wait for some summer road trips. Just not great for while holding a job/uni.

Looking forward to the travel and then back to settle down for a job (hopefully) and start saving some decent money Realise I haven't followed many ere principles in the last three months, but have been moving around a lot and not focused on it at all

[workforcerefugee]

Hi Rural Kiwi,

Thanks for posting your journal entries. I’ve really enjoyed reading them.

I’m a 42 year old man living in a small town in the USA.

If I were in your shoes, I think, after completing university, I would go back to living in the van for a time while working in order to save as much money as possible to put towards early retirement and/or an eventual land purchase. In order to make van living more tolerable, I would try to build friendships with local people of all ages. Perhaps you could meet people at the local pub, library, shops, church, or community events? Having friends to visit would help with the loneliness and might give you a place to sometimes hang out, shower, store some items, do laundry, or cook. You could even offer to pay a little or do some odds jobs/cooking/housekeeping in exchange for being allowed to do these things at someone’s house. It could be a win-win situation for you and them.

It might be nice to work for a while before buying land and have time to think about where you really want to be long term. You could work in New Zealand until your student loans are paid off, saving money and giving you time to think over if you want to move out of country or not without already being tied down by a land purchase. Perhaps you could find a rural shared housing rental situation down the road with part of the arrangement being the opportunity to plant some of the land as you see fit and keep some animals? Renting before buying would be a nice way to try out the lifestyle before you are tied down by a purchase. You could also ease into things by starting with just chickens and see how that goes before acquiring the milk cow, which would be a larger time and labor commitment. I think you would find it a very satisfying hobby to grow a vegetable garden, even if it did not provide for all of your food needs.

I hope you continue to post. It’s fun to hear about your experiences.