Show me the money

finances-copieIn a prior post, I addressed some of your questions about how we manage business affairs while living this nomadic lifestyle. However, there’s one question that people don’t ask because it is so personal: How in the world can we afford to do this? After all, we retired in our late 50’s, bought this fancy bus and are traveling the US full time.  How did we get here, financially, to enable us to live the dream?

We saved early and often. We were blessed to be able to obtain college degrees and good jobs which provided a good income. But, we never spent all of that income. Neither of us came from moneyed background, so our needs and wants have always been modest. Beginning in our 20’s, we saved a significant percentage of our paycheck and increased that percentage with every salary raise. We worked very hard to achieve success in our professions which helped the income side of the equation, but we always chose to spend significantly less than what we made. That difference went to our savings.

We invested for the long term. Jeff became a student of investing and placed our savings in a range of investment vehicles that would perform well over the long term. We took full advantage of any benefits offered by employers such as tax deferred 401K plans and, over time, worked up to the maximum allowed annual contribution.  We didn’t touch our savings for short-term gratification items such as vacations or new cars. We also made it a priority to eliminate debt, never carrying credit card balances and always paying off any loans (car / home) earlier than scheduled. Jeff ran annual net worth statements so we could monitor our progress and keep us on track. By our early 50’s we were completely debt-free. Jeff also took the opportunity to invest in a business partnership, which proved to be an excellent decision.

We set a goal. As we evaluated retirement options in our 40’s, we solidified around the concept of fulltime RV travel. It was a vision that really excited us and we knew it was achievable. So we began a 15 year (on and off) process of research to learn all we could about what we would need, and what it would take to accomplish this goal. We went to RV shows, read books, and surfed the web to study all of our options.

We crunched the numbers. As we hit our 50’s, we started getting serious about  retirement timing. I am fortunate to have a pension coming from Motorola, but we won’t draw it until we hit 65 and our full Social Security retirement age is almost 67. For a successful early retirement, we had to have sufficient savings (or income) to pay the bills until those pension income streams kick in. So, we calculated our estimated annual budget for life on the road. We made key decisions, such as not keeping a home base or storage unit, which would help reduce our spend. We figured the savings we would need to fund an early retirement and started driving toward that number.

We received an unfortunate windfall. We received a sizeable insurance settlement as a result of our son’s accidental death. Frankly, I didn’t want it at first. It felt wrong somehow, like blood money. I wanted Nathan back. I’d still give it all back in a heartbeat if I could have him instead, but I can’t. Over time, I’ve come to see it as his parting gift – a mechanism to give us the freedom to move forward into the life we had dreamed about. The windfall allowed us to buy a nicer bus and go sooner than we’d originally thought possible. I figure we owe it to Nathan to live this life with all the gusto we can muster.

We executed the plan. We sold the house. We gave away all of our stuff. Jeff quit his job. We bought the bus, left our place of security, and moved forward. It’s all good to plan and save, but actually doing something this drastic takes quite an effort. It’s worth it, though!

So now, 7 months in, how are the finances working out?  Pretty darned well. Our actual spend is fairly close to our previously estimated budget. We have a modest income stream from my part-time consulting work and our two rental properties. And Jeff’s business stock sale is paying out over 10 years, so it’s like getting a monthly paycheck. Essentially, our income is covering our current expenses, so our savings can continue to grow against future needs. Sweet! We’re doing just fine.

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