Home > When My Financial Freedom Ducks Fell in a Row

When My Financial Freedom Ducks Fell in a Row

July 15th, 2014 at 11:30 am

I retired in January of 2013. Once I had made my final decision and plans the previous October, I could hardly wait and I was all excited to embark on a new free-from-a-job life. And I was excited enough to write the article that follows to let the world know that I was shaking free. Here is how that felt.

This is really great. I finally have got my spending, income and investing ducks all set up for financial independence. Hey, folks! I am FREE!

The last piece of the puzzle just fell into place. With the help of cash I just got from selling some vacant land, I have eliminated my mortgage payment. This in turn has dropped my gross annual living expenses to a mere $18,000(1*). And, since my gross "passive" income is $53,000 a year, I've got a whopping $28,000 after taxes available to spend for fun(2*). Whoppee!

Before we start getting into details about the kind of living I (or you) can do on $18 thou a year gross, and the specifics of my income stream, I think it would be a good idea to give you some context about my situation.

I am a 65-year-old guy living in Virginia. (I know, I know, 65 is not early retirement by any means. BUT I only started hands-on planning for retirement 4 years ago. So I think that's still pretty good.) My working career included jobs in chemistry, marine science, sports diving, marketing, advertising, management, and non-profit administration. And now I spend my fun time hiking(3*), biking, reading history(4*), exploring civil war battlefields and national parks(5*), blogging(6*), watching movies and playing computer war strategy games(7*).

I am married and my wife still works. Due to business circumstances, she and I are living in separate houses 100 miles apart, and each of us individually covers his/her housing, auto and other basic living costs(8*). So the numbers you are going to see here are for me, the house I live in and my individual basic expenses.

Now, where's that $53,000 a year income coming from? Here's the breakdown: $20,600 from Social Security, $27,500 from stock dividends and bond interest(9*), $1500 interest from peer-to-peer lending, and $4200 from a little consulting side hustle.

Now, what's that $18,000 gross a year ($15,000 a year after taxes) getting me for a basic lifestyle? Well, let's see.

I live in an 1100-square-foot house on 1.25 acres, with a nice big attached garage and workshop. I eat just fine, thank you, with lots of meats and vegetables, and no keeping-the-cost-down reliance on pasta, or rice-and-beans.

I am insured up the wazoo (or so it feels). Okay, I do have Medicare, (which I have been paying for through paycheck deductions over my entire working career) but I have also made sure to have supplemental coverage to keep my retirement stash safe from hospital-cost-threat(10*). Same goes for insurance to cover long term care, personal liability, the house, and my pick-up truck(11*). (Nope, no life insurance; my wife and I agreed we no longer need it. And yes, my wife carries her own auto insurance on her own vehicle.)

I drive a 1996 Dodge Dakota extended cab pickup truck in super good shape -- and no loan payment(12*). And I've got all the hiking, biking, computer, photography, workshop and what-not toys I could want.

Oh, yes. That $15,000 a year net includes reserves for auto maintenance and repairs, home repairs, and pet care.

And here's the typical "basic" day I get for my $41 (times 365 days = $15,000). Get up when I want (usually just after first light) in a paid-for house, enjoy my breakfast without any time-pressure while listening to classical music, surf blogs a little, then spend an hour or so managing my stocks and bonds. After that, go do something physical (in the workshop or on the grounds) until lunch. Then I've got 4 hours of totally open time to have fun hiking, biking, computering, netflixing, taking an online history course, blogging, etcetera. (And none of that costs me anything over and above what's already included in my $41 a day basic living cost.) Right around 5pm I get back to my "work" desk to do some home administration paperwork until it's time to cook up and enjoy a steak/ chops/ ham/ chicken/ fish dinner. After that, it's hang-out time with the dogs and the cats -- while doing some more reading or netflixing or pc game playing. Not a bad deal, I think, for $41!

Of course, I've also got another $2300-plus available each month in discretionary income to spend on anything I please. But most times I really have to work at finding something to spend that money on(13*).

What does it take to keep those basic living costs at less than $1250 a month? I've always been a thrifty guy. (My wife sometimes thinks I cross the line into skinflint territory.) But I have to give a big, big thank you to Mr. Money Mustache and his blog for really opening my eyes to just how much you can lower your living costs by pursuing a strategy of what I would call no-sacrifice frugality(14*).

Inspired by Mr. Money Mustache, in the last few months before actually retiring I lowered my annual costs for stock trading by $1000... for phone/internet/tv utilities by $750... for debt interest costs by $2700... for electricity/propane/fuel oil by $750... and for a stack of other miscellaneous budget line items by $850. That's over $6000 a year sliced off what used to be my living costs before I pulled the retirement trigger! Without giving up any comfort, convenience, or capability.

And so now here I sit, expectantly planning what adventures I am going to have with my annual $28,000 spend-for-fun discretionary money pot.

That is how it felt back then to be looking forward to financial freedom. Now, I am having those adventures. And still feeling the same great way.

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1* My $18K Annual Baseline Budget:
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2* A Discretionary Fund, Not a Discretionary Budget:
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3* My Love Affair With Hiking:
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4* Time Traveling With History Books:
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5* Frugal Fun: Hiking Civil War Trails:
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6* 200 Words A Day That (Hopefully) Matter:
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7* My Strategy Games Rainy Day Passion:
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8* Marital Finances Our Way:
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9* Why I Only Buy Dividend Stocks:
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10* Taming My Health Care Costs:
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11* My Stash-Shielding Insurance:
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12* My Oldie-Goldie Thrifty-Nifty Truck:
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13* Making Sure I Spend That Money!:
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14* How I Do Frugality Without Sacrifice:
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3 Responses to “When My Financial Freedom Ducks Fell in a Row”

  1. SecretarySaving Says:

    You are very organized and detailed. I love reading your blog and enjoy the break down on things. It really helps me put things into perspective. I also enjoy simple things like going for a walk and reading.

  2. Beawealthywarrior Says:

    Congrats on getting rid of the mortgage! That's my main goal at the moment Smile

  3. Retired To Win Says:

    Thank you, Beawealthywarrior.

    And thank you , SecretarySaving! Attaboys like yours keep me motivated to post. Smile

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