Author Topic: Take some time off to explore interests? Temporary downshifting gameplan  (Read 2576 times)

Craft_endlessly

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Hey everyone, first post so here we go.
 
DH is 25 and I am 24. We have only been working about 2 years. I know according to living afi, that it would be better to wait until we have about half our assets before doing this to take advantage of a larger compounding amount. I fear if we wait too long, we will become too complacent.

DINKs annual income ~90k gross combined.
Yearly spending  is <20k
Current savings 42k invested (22k in IRA, rest in taxable investment accounts- No 401k option at either workplace)
Rest held in a money market. Should have ~112k total assets if we take off 6 months from now. That means 54-60k will be invested, rest is Money market to pay the bills and cover contingencies (we both drive old cars that might die soon, we are buying 10k business equipment, we need some money for breathing room 6 months-1.5 years)
No student loans thanks to generous parents and grandparents.

Why are we uprooting?
We both have jobs, 7-8 hours drive from family. it is a long way to see our folks and we aren't terribly happy here. My grandparents have a old abandoned house that needs some work to sell, so essentially we plan on living in it and fixing it up (rent free- which should cut our expenses by about half?) and will have a small payment upon completion. My dad also has a rental house that needs work that he is willing to cut us in on a portion of the proceeds. Repairing places is an interest of ours- so we get to do it on someone else's dime (we will do it for ourselves and maybe get into rentals if it agrees with us in the future). It will not pay as well as our current jobs but I feel it would be better to pursue some interests/ business ventures now while young and optimistic with low spending needs than when we get tied down with kids and higher expenses. Essentially, if we are lucky- we can figure out how to make a living out of doing our own thing. If not, I can go back to work knowing I gave it my best shot and continue to squirrel away to FIRE.

The gameplan: Take some time off: 6 months-2 years. Shorter period is to be preferred as we are still early in our careers. However, if business ventures/ freelancing goes well- then we may take a longer period of time to let it grow (I think we should know viability by a year or so in business) If it doesn't work, or I turn into a lazy bum without the external pressure, we can pursue regular employment. I don't think going back will be an issue with our skill sets. We know numerous CAD programs (solidworks, rhinoceros,etc), Adobe:Illustrator, Photoshop, Indesign, A bit of Wordpress management, basically design graphics and all kinds of things. There are so many ways to use the above to find regular employment even if we aren't able to successfully freelance. If we are exceedingly lucky, I may be able to do my  job remotely(gross 50k) which would take all the risk out of it, as that would more than cover living expenses and max our IRAS while letting us engage our interests.

I am a little worried about taking some time so early- but I should be able to show productive use of it(starting a business, remodeling houses, possible freelancing). We are still pretty young, not all mid twenties people have properly settled so I feel like a gap won't be the end of the world.I know I will need to get DH a health plan on the exchange (he will be turning 26). So, I guess I want advice on anything missing, other ways to handle holdings (invest more and hold less in money market?). Ideas for graceful exits and re-entry into the workplace or good freelancing books and advice?   

deborah

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You seem to be all over the place. First off, you are taking off 6 months to 2 years to fix up 2 houses, then you are getting into real estate, then you are starting a business, and who knows what?

Sure, there are a lot of things you can do, but if you take off with a plan, and a set of criteria as to whether it is working or not, you have a much better idea when you need to declare it a success or a failure. If you try to do all of them at once, you WILL fail.

Think it through.

Work out the logistics (can I support myself for that period of time assuming the worst happens and I don't make any money?).

You could possibly get time off work for 6 months or a year, but if you don't know whether it will be 6 months, a year or two, they won't come to the party. And if you have a deal with them, it will be a good backup plan, in case things don't work out.

It does sound like you could make a living out of fixing up houses in the area where your folks live, if everyone has houses that need fixing up and selling, but it might be that you tire easily of living in a place undergoing renovation - it certainly is one of the things that does burn up relationships quickly. So you need to have the ability to go to something else if you find it is not working out.

Craft_endlessly

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Logistically, we have 5 years of current yearly spending. We expect to spend 1 year  of expenses 20-25k (which may actually sustain 2 years since we will have lower expenses (such as no rent). We have added some extra for buffer. Expenses will determine exactly how long we have,but it will be less than what we spend now due to LCOL.

We are starting with the remodels. If I can keep my job, I would work remotely which would slow down the remodel. If I cannot keep my job, well I can do what I plan without it. 

When remodels are complete, we will launch a business- we do have a plan and estimated expenses for that. If that works out, great. We could also pick up regular jobs here if we wanted or as opportunities allow.

We can't get into real estate just yet- it would consume too much and leave us too cash poor, especially with unknown income coming in. If after remodeling, I was sure that is what I wanted to do asap, I would likely go back to work and save up a down payment on a rental property.

arebelspy

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It's hard to regret making a choice to live more fully.

If you can't do that in your current situation, a change may be needed.

I personally wanted to get working out of the way for full freedom, but I do see the appeal of getting a big chunk to let compound for 30 years, and then go semi-retirement to just part time gig for those 30 years to pull in just what you need, and eventually you'll have enough to full ER.

I think taking two years off will substantially eat into that 100k you have saved, so it won't be compounding a lot (unless you're earning what you're spending, but even if you are, and the market cooperates, which is another big if, two years just isn't that long to let something compound).

I'd think work a little longer, but if you're unhappy and that's the source, and you can't see a way to become happy in your current situation, quit today.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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mozar

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Energy wise it takes more energy to work an office job than do projects you are interested in. Also remember that we live in an ageist society. So the older you get, the less people will be interested in hiring you.

You could be FIRE in 6 years. Then you have the rest of your life to fix up some houses.

Bearded Man

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You seem to be all over the place. First off, you are taking off 6 months to 2 years to fix up 2 houses, then you are getting into real estate, then you are starting a business, and who knows what?

Sure, there are a lot of things you can do, but if you take off with a plan, and a set of criteria as to whether it is working or not, you have a much better idea when you need to declare it a success or a failure. If you try to do all of them at once, you WILL fail.

Think it through.

Work out the logistics (can I support myself for that period of time assuming the worst happens and I don't make any money?).

You could possibly get time off work for 6 months or a year, but if you don't know whether it will be 6 months, a year or two, they won't come to the party. And if you have a deal with them, it will be a good backup plan, in case things don't work out.

It does sound like you could make a living out of fixing up houses in the area where your folks live, if everyone has houses that need fixing up and selling, but it might be that you tire easily of living in a place undergoing renovation - it certainly is one of the things that does burn up relationships quickly. So you need to have the ability to go to something else if you find it is not working out.

This. I'd stick to staying working and doing the work in free time, at best only having one person quit their job, if not for security, for cheap health insurance. It's not going to kill you to work for another 5 years. Doing so will give you options and buffer.

tj

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Unless you absolutely hate your jobs, it seems like bad timing.

Craft_endlessly

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Hey, thanks everyone for responding.

I think my husband and I have decided we are indeed moving, we are unhappy enough with this location. I will look into how to convince my employer to let me work remotely. I think the odds are pretty good on this, and there are others that work remotely (in different positions) so it shouldn't rock the boat too much. This is ample income for living expenses and maxed IRAs + a little extra, so basic financial stability and future building but nothing spectacular. Anything my DH gets and makes on top of it would propel us toward FIRE.

My aim is not as much for RE. I expect to eventually get to FIRE. As early as we are starting, even with roadbumps- I expect to be there before 40. Best projections place it within reach at 32, but I think we plan on children before that (which will derail it a little bit).

I agree this would be a big chunk of savings, I expect we could earn a bit of income doing side things but it is risky. I think we will not plan on taking as much time and find new jobs there fairly quickly (easy part time work wouldn't be an issue to get at all (worse case) and a proper professional job might take longer to find/get, but is perfectly doable.

You guys are right, it won't kill me to work longer. And this is a bit premature and impatient to take so long a break. So off time is only so long as it takes us to find employment (which may be a few months), so that our savings don't errode faster than absolutely necessary. I think relocating would be better for us, and allow us to do some of these other things(remodeling) on the side, and put us closer to family and friends. All things I think, would make us a bit happier- even with new office jobs. Must remember that this(work) is all only temporary and will go faster than I realize. I don't think we want to stick out the next 6-8 years here since we are already malcontents. I think that is entirely possible in the relocation city for us to work however many years to FIRE and have closer relationships with family which hopefully translates to more contentment...Time will tell.