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Monday, September 21, 2009

Could We Stop Working RIGHT NOW?: Financial Independence

Those of you looking for facts and figures for the goal of EARLY RETIREMENT: this is not the right place. That's never been my goal. But I've always been attracted to the idea of FINANCIAL INDEPENDENCE, a la Your Money or Your Life, not so I could quit my job, but so I could say every morning: I'm going to work because I WANT to, not because I HAVE to.

Now I don't actually know how much is in our retirement accounts, because I only glanced at a statement once over the past year. (Surely, I'm not alone in this possibly self-destructive behavior). Following the laws of averages, I know I was WAY down, and now am part-way up.

Yesterday, while taking a stroll through the neighborhood, I saw a yard sale sign by a pretty house with a FOR RENT sign out front. I wandered in and overheard the discussion: tenant is not owner, but renter. She's moving to Baton Rouge because she lost her job here and just got one in Baton Rouge. The reason she's renting is that she and her husband still own a house in Arkansas that they cannot sell. She and her husband live separately because of jobs.

Obviously, this is a snapshot of the upper middle-class version of the financial meltdown.

But here's the part of interest to ME. The house is owned by the Poole family, an old money family that owns a lot of the prettiest houses in the neighborhood. So it will NEVER be for sale. At least not for many years. If then.

The rent is $1800.00/month! Sorry New Yorkers: that sounds like a lot. The house is about 2/3 the size of mine, with a smaller yard, though with updated bathrooms.

Let's say we could rent our house for around that much. We OWN it free and clear. Hey! We could live in Costa Rica, where many Americans are now retiring, for between $1500.00 and $2500.00 a month. We would barely need to touch our emergency fund, though we would use it for family visits to and fro.

Then in 10 years or so, we could start tapping our retirement accounts, which surely would have recovered somewhat.

Mr. FS thought for a minute after my report. He queried, "What would we do in Costa Rica?" Well, take walks, appreciate beauty, cook. Sounds good.

But what would we do ALL DAY? Read. Walk. Talk to people.

That's kind of what we do now, though not in such beautiful surroundings. Plus, who would listen as I hold forth on this or that literary work? Could I find someone in Costa Rica who would want to know how beautifully constructed is a poem by George Herbert?

Isn't it nice to know we COULD do it? That, even now, we are going to work because we WANT to, not because we HAVE to.


FB @ said...

Couldn't have said it better.

People ask me why I think I want to have a simple retirement instead of one full of riches & experiences.

I ask them why not? Because when you're older you're not going to want to travel every month or eat out in restaurants all the time.

It's not our style. We're more into reading, blogging (me!), cooking, eating, sleeping, and just being relaxed and calm.

And that just happens to cost less money.

And I cannot stop working right now, but even if I could stop working, I wouldn't. :) Like you, I love my job.... !!!

Duchesse said...

Also, as you eye that beach, consider a big what if- your health. I'm guessing you have health insurance, which would be a different story abroad. Canadians are famous for "six months less a day" which is the limit I can be out of my country and maintain my coverage.

As I age, the supplemental insurance costs to be taken care of out of the country skyrocket.

I could pay for care myself in a developing country- it's cheap- but would have to think long and hard about major surgery there.

thecouchpotatoblog said...

I have often wondered whether, if i could liquidate all my financial assets and pay off my debts, I would have enough cash left over to live comfortably, and without working, for the rest of my life. The answer to this question is, unfortunately, a big no. I am yet to repay my student loans, and I have recently invested in some property along with a group of people, making it impossible for me to back off on my own. I hope this situation will improve in the next coupe of days.
The Couch Potato

Frugal Scholar said...

@FB--You've certainly figured all this out at a young age! Lucky you.

@Duchesse--This was more an "I can't believe it would be sort of possible" than a serious plan. I think I read that many Americans are going to Costa Rica for medical procedures, because of high quality and low cost.

@Couchpotato--The amazing thing is that my "plan" doesn't involve liquidating anything. Just renting the house out.