Author Topic: Case study:should I relocate?  (Read 2041 times)

Livinginthemountains

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Case study:should I relocate?
« on: June 28, 2017, 07:48:01 PM »
I'm a 38 year old single female. I have been self employed for 17 years working and living in the same location.  I have a paid off mortgage and have been completely debt free for 2 years. I moved into my beauty shop and started renting out my home area for extra income. I live in a small town and my income will probably not raise much. I've often thought to relocate to a bigger area so I can charge more for my beauty services... however I will not be able to get as nice of a house for the same money and I currently  have no cost of commuting to work. My only bills are car insurance and cell phone which comes to $75 a month for both. The rent I collect is covering all the utilities, property taxes and insurance so I am living for free. Question is what should I do to retire sooner stay put and save my $ or relocate to make more income?

sokoloff

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Re: Case study:should I relocate?
« Reply #1 on: June 28, 2017, 07:56:36 PM »
IMO, you have to look at the big picture and not just focus on the monthly cashflow. There would be a significant investment in moving to a higher cost of living area where you could charge more. Having to build up a new clientele in the new city would take time to get back to break-even with what you have today. That digs a hole that the new place would need to fill in before you've even broken even. Moving is a hidden tax of time and money.

Do you like your current living and working arrangement? If you pretty quickly and confidently answered "Yeah, I do", then you probably ought to stay put. If you quickly said, "Hell no; this sucks!", then you should change something.

Could you leverage other people's labor somehow? Could you lease out a chair in your current place to another provider? Could you lease out your current place while you built up the practice in the new place? Could you make that a permanent deal, where you had income coming in every month before you ever touched a pair of scissors?

Could you increase your income with product sales (either directly related to beauty or in the larger health/beauty/diet arena)? Could you host yoga/similar classes at your facility (leasing space to another provider)? What else would your existing clients be interested in? Is there an opportunity to sell online or provide monetizable content online?

Moving and doing the same thing in a more expensive place doesn't seem all that likely to speed up your "time to retire".

jooniFLORisploo

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Re: Case study:should I relocate?
« Reply #2 on: June 28, 2017, 10:28:32 PM »
Your situation sounds wonderful! :)

I think sokoloff's post laid everything out very well. Building clientele elsewhere can be a slog, and costly in terms of lost time. The ideas for increasing your business income without increasing your costs or hours are excellent.

jooniFLORisploo

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Re: Case study:should I relocate?
« Reply #3 on: June 28, 2017, 10:31:48 PM »
Hmmmm...I'm curious what the don't-pay-off-your-mortgage folks here might advise you to do. (Refinance and invest?)

Feivel2000

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Re: Case study:should I relocate?
« Reply #4 on: June 29, 2017, 12:10:44 AM »
Congratulations, you are in a very good and comfortable position.

I would not throw this away without a solid plan for the future. Take your time to do a lot of real, deep research.

Find a city you could stand to live in and look for possible places for your shop. Know what rent you would need to pay in the new city. Check if there are different taxes. Look how much competition you have there and what they are charging for their services.
Is there competition? No competition could simply mean that there is no demand, too much competition could be bad for prices. Call some competitors and try to make an appointment to get a feeling how much they have to do. Maybe really make a appointment and check out how they are working, gather information by smalltalk.

Don't forget: higher demand is only one possible reason for higher prices. Higher costs could be also a reason (and would not help you).

And that's the business side, do the same for your personal living expenses.

Then you can make an informed decision.

Let us know what you learn!



pbkmaine

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Re: Case study:should I relocate?
« Reply #6 on: June 29, 2017, 02:54:11 PM »
How much are you able to save each month in your current situation?

Livinginthemountains

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Re: Case study:should I relocate?
« Reply #7 on: June 29, 2017, 04:56:07 PM »
I don't plan to ever refinance. I worked so hard to pay off the mortgage.  I would feel like I would be going backwards. I feel that living debt free is a part of early retirement. I am saving 70% of my income. Some months a little more depends on what I want to spend $ on.. in the past 6 months my clothing cost was $45. This includes a pair of water shoes for my camping trips and some dresses from the goodwill.  My transportation cost was $767 for 6 months. I own a 2008 subaru I rarely drive. This includes insurance, gas, one oil change and a new rear wheel barring that my BF replaced so I only had to buy the part. I splurge on coffee at the grocery store a bit... inwhich I could cut out...so I'm pretty frugal. It would be great to not have a car....but I like going camping in the middle of nowhere.

pbkmaine

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Re: Case study:should I relocate?
« Reply #8 on: June 29, 2017, 07:29:15 PM »
So, have you done the calculations? How long until you have enough money to retire? And is early retirement your goal? What are your goals? It seems like you have a nice life where you are - why change it? If you have burning ambition, you could move to the city, expand, franchise. I am not sure I am hearing that from you, though.

Elderwood17

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Re: Case study:should I relocate?
« Reply #9 on: June 29, 2017, 08:32:59 PM »
Are you happy where you are in your current situation?   If yes, sounds like you are in a great place in life.

coolistdude

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Re: Case study:should I relocate?
« Reply #10 on: June 30, 2017, 08:59:31 AM »
I am happy with my life. I've done some calculations and I've adjusted my numbers to save more $.. however will it be enough...I currently live on a 22k income yearly.This does not include my rental income. I work 4 days a week. So as far as time I guess I'm already semi retired.  Money wise I am far from it. My goal is to not follow my parents footsteps. They never saved a dime and now in their late 50's it's crunch time :(  I just wanted to see what others would do.. stay in a current happy life or move to make more $. I see people on here that make tons more $ than me. Holy crap with their $ and my lifestyle I would be so well off.

It's easy to get discouraged looking at other people and their income. I have a family member that went through $150k/yr and argued with their spouse about money constantly, while I made $50k and my wife and I were tight on money, but managed. What is your FI date? It sounds like you are putting away about $80k a year? That is amazing! I used to live in a small town and it is much nicer than the suburbs where we are now.

I know I said not to compare between other people but I really admire you for paying off your house and saving 70% of your income. You are a rockstar. Now that you have your money really worked out, you may want to focus on inexpensive interests or hobby. MMM has a balance between money and enjoyment of live without extravagant spending. It sounds like you can really focus on the latter. Most likely you are 5+- years away from retiring, so I would begin to turn your attention to enjoyment. Is there a local river you have wanted to visit with family but haven't due to working hard to pay off your house? Consider doing that and making memories.

Just my 2 cents. You are a rockstar from my perspective and I'd like my finances to be like yours :)
The good: 27 years old, 1 car, not renting anymore.
The bad: Single income, only about $17k in retirement, and no FI date.
The ugly: 1 year ago I was doing much better but lost all possessions due to mold. It has been an emotional roller coaster.

Blog: http://bravelycontent.blogspot.com/

jooniFLORisploo

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Re: Case study:should I relocate?
« Reply #11 on: June 30, 2017, 09:04:02 AM »
Would I move from your situation only on the vague hope of increased income? Firm nope.

I would move from anywhere to anywhere if it were necessary to bring in sufficient funds for living and basic saving, and I would move from anywhere to anywhere if guaranteed to make huge money doing something I were skilled at. Neither of these apply to you. I sure wouldn't give up what you have (or what I have) on the chance of possibly making more money.

Yes, it can be a bummer to read the high incomes on here, so just come play with us lower-income folks in the journal section or on the "are there any low-income mustachians" thread.

jooniFLORisploo

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ChpBstrd

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Re: Case study:should I relocate?
« Reply #13 on: July 05, 2017, 01:01:16 PM »
Sounds like you're semi-retired and living frugally, so congratulations. However, the low income potential of your current lifestyle means it would be hard to transition from semi-retired to full FIRE.

I suggest articulating a specific vision first and going from there. For exame, to live on $25k in perpetuity, you'd need to save/invest $625k. Think for a couple of months how you might do that. You know more about your specifics than any of us internet people. Maybe this involves a move. Maybe not.

Some options that come to my mind include:

1) Acquire or fix up a few rental properties in your town.
2) Get an online degree or set of certifications in a high-wage profession, then change careers to that profession (may or may not involve moving).
3) Pick up part-time work on the weekends, invest the proceeds.
4) Start a small business, e.g. an eBay, Etsy, or amazon store. What unique things can you source locally from your neighbors? Arts? Antiques? Products? Agri commodities?

backyardfeast

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Re: Case study:should I relocate?
« Reply #14 on: July 05, 2017, 04:00:58 PM »
It sounds like you have a wonderful life! I love all the other replies.  My question would be, if you have a nice set-up and want to retire early, what kind of life are you envisioning once you retire?

IOW, if you want to stop working in your beauty shop, which is now also where you are living, will you just close the shop and keep living there? Would you sell the business and building and move--even if you stay in your current town? 

It might bear thinking through what you would like your non-working phase of life to look like and then take steps to create that while you carry on carrying on.  I wonder, for instance, about the possibility of a rental property in your current town.  If you bought something you thought would be nice to retire to, you could rent it out now to pay down the mortgage, and then down the road, sell your current set-up and move, paying off the remaining mortgage with the proceeds.  Or buy a duplex, so that when you move in, rent continues to contribute to your income after you retire.

Good luck--you sound like you're in a wonderful position thanks to much hard work and self-discipline.

jooniFLORisploo

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Re: Case study:should I relocate?
« Reply #15 on: July 06, 2017, 07:22:17 PM »
Great that the thread has been helpful for you, LITM :)
There are some shenanigans on the forum, but also LOTS of great people and great support.
Thanks for touching base to let us know where you've landed so far.

coolistdude

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Re: Case study:should I relocate?
« Reply #16 on: July 09, 2017, 09:30:13 PM »
All the comments on here has helped me view all this much differently than I did before posting. I thank you all for your views and comments.  I believe I'll be staying where I am :)

MMM forums to the rescue! The people here are a gold mine.
The good: 27 years old, 1 car, not renting anymore.
The bad: Single income, only about $17k in retirement, and no FI date.
The ugly: 1 year ago I was doing much better but lost all possessions due to mold. It has been an emotional roller coaster.

Blog: http://bravelycontent.blogspot.com/