Why Now and How

Why would we quit our jobs, especially right now as we are just beginning our family?

For my wife, the plan was always to stay at home while little ones were around.  For me, it is a little more complicated.  Independence and autonomy have always been important to me, and in some ways, it is surprising I lasted as a teacher in a mainstream school for so long.  I was attracted to the idea that a teacher could be creative in what he teaches.  As the years passed, it became apparent that creativity and freedom are not well tolerated in a system where conformity and standardization are enforced.

I always thought my traditional teaching career would be shorter than a full length “typical” teaching career.  It’s not that I didn’t enjoy teaching – I did.  I just knew that I wanted some more freedom at some point in the future.  I have also seen many teachers, exhausted and burnt out after years of teaching, yet feeling trapped in their jobs, dependent on a pension that required them to stay in education for a full career.  I have always said I would leave before I became a burnout, I just didn’t know how soon that would be.  

Why did I quit this year?  If I would have waited another year, I could have added another year’s worth of savings to the “up from wage slavery” fund.  Even better, I could have waited another ten years and had a decade’s worth of money to play around with.  Wait, I have the best idea yet!  I could have planned on working another 30 years and then be totally set for my retirement!  The problem with this logic is it can be quite easy to fall into the trap of, “tomorrow I will make changes in my life”.  There will never be a risk-free time to take a risk.  In ten years, I may have more savings if I continue teaching, but I am sure there will be other excuses to keep at the same old job.  Life is something that happens once.  I can always go back to work.  I can’t go back to create memories that I missed.  I can’t go back to build relationships I was too busy to build.  I can’t go back to take opportunities that I skipped over when I was working.

Many people told me to cherish the moments with my young son because the time flies by so quickly and I can never get it back.  My wife and I quickly realized that the time for me to quit was now, not ten or fifteen years from now.  From discussions about life, I have found that people consistently have many more regrets about what they didn’t do than about what they did.

If all my ideas fail, and we can’t figure out how to make any income, I will go back to work knowing I took a risk for a worthy cause.  I will also go back to work having great memories of the time I spent with my family.

Financially How is this Possible?

Aided by my frugal life choices and a down market, I was able to acquire two rundown houses that I, with the help of others, renovated and turned into profitable rentals.  The rentals required money and lots of labor upfront, but are now a relatively easy source of income. They produce enough cashflow to cover all the expenses associated with them and cover our own home mortgage as well.  With our basic housing expenses covered every month, all we need to focus on is our living expenses.  These include: utilities, food, transportation, clothing, baby supplies, entertainment, health care, and other miscellaneous expenses.  Our budget goal is under $1,500 per month for all this.  We are confident this is achievable, and have set aside the financing to live for two years without a dime of additional income.

I am not going to detail specifics in all categories of expenses but will explain the general expenses.  We keep our housing costs low by living in a small 750 square foot house.  If more and more babies continue to join our family, this may be an issue in the long run, but for the next few years, our current house will do beautifully.  Although we have two cars, we have kept our transportation costs low by buying used, fuel-efficient vehicles and don’t do a whole lot of driving.  Our feet, bikes, and longboard do most of the day-to-day movement.  

I love eating but have some good tricks for eating well on a budget.  I will share more on this at a later date.  We have been incredibly lucky to have the friends and family we do.  Because of hand-me-downs and gifts, we haven’t bought baby Sam more than a couple articles of clothing in his six months on earth.

Health care has been a pleasant surprise for us (said nobody ever).  No, actually it will probably be cheaper, in the short run, than we had planned.  The Affordable Care Act, with its many issues, might actually encourage more people to take entrepreneurial risks, which should theoretically be good for the economy.  As our income grows, our health care costs will increase, but for now, we are heavily subsidized.

To summarize, our life is relatively simple but not impoverished. I would consider us more frugal than the average American family but not on par with the extreme frugal types like Jacob from Early Retirement Extreme. I do realize, like most things in life,  frugality is relative.  To most of the world we live lavishly.  To many of you reading this, we are pretty cheap.  To some of you, we are probably wack job extremists.  I assure you though, we aren’t.  We are still living fulfilling lives.  This summer has been filled with camping, swimming, concerts, and parties in the park and parties in the street.  We aren’t eating at all the trendy restaurants in town,  closing down the bar, and driving home in our BMW M3.  But we are living a good life, with our energy being spent on what is important to us.

Gameplan:

So what is the plan for earning income?  We actually don’t have a solid plan and we are ok with that.  Because we have two years’ living expenses on hand, we feel like we can take our time to see what kind of meaningful opportunities arise.  

One of the most likely sources of income could potentially be real estate. I have been continuing my self-education in the many aspects of real estate and hope to find more opportunities in this area.  Finding another low cost, beat-up house in my neighborhood could be a perfect opportunity for another rental or even a flip.

In case you couldn’t tell, financial literacy is a passion of mine.  I have a couple of volunteer ideas for sharing my passion.  But I also believe I could earn income while sharing my passion with others.  No specifics are laid out yet, but I have a skill and knowledge in a realm from which many people could benefit.  Teaching, speaking, coaching, and consulting are all options that I may explore in the coming months.

The greatest aspect of creating a low cost of living lifestyle is the freedom which comes from it. If we insisted on new cars, we couldn’t do this.  If our house was twice as big, this would be impossible.  If my wife had an expensive shopping habit and I had a taste for expensive whisky, I would still be a wage slave.  If we suffered from all of the above, we would both be wage slaves, and someone else would be the lucky one getting to hang out with baby Sam.