Author Topic: Am I nuts? Is this doable...all comments criticisms are welcome  (Read 4739 times)

jimmygibbon

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Am I nuts? Is this doable...all comments criticisms are welcome
« on: December 11, 2012, 02:53:27 AM »
Hello Fellow Mustachians,

Please offer your opionions, suggestions, criticisms:

Here is our scenario.  I am 52 and my husband will turn 61 in January of 2013.  We have spent a substantial amount of time in foreign countries, researching a permanant relocation. (we are Americans currently living in Wisconsin).  We have decided that we would like to move to the Dominican Republic in the last quarter of 2013.  We will not initially purchase property.  There are many rental condos that will suit our needs ranging in price from 500-1200 per month.  Our living expenses in the DR will be approximately 2000 per month.

The Numbers:

I am currently employed full time and would leave my job before the move.  My husband is semi-retired.  We own an entertainment venue that opens for 11 days per year and nets us between 35k and 40k per year.  The venue is valued at approximately 280,000 and it is paid off.  I had initially thought we should sell the venue and invest the proceeds from the sale, but we enjoy the 3-4 weeks annually of work required, and 35k seems like a good return on a 280k investment for now.  We would return to the states for approximately 1 month a year to work the venue.

Current retirement accounts:  120,000
Cash/Savings:  148,000
House:  Value = 230,000  Mortgage Balance = 140,000 = 90,000 equity
Entertainment Venue:  Value = 280,000   No Mortgage Balance
Annual Net Income from Entertainment Venue:  35k-40k annually.
No Debt other than the mortgage

We plan to sell our home before the move.

If my husband takes his Social Security at 62, he will receive approximately 1289 per month

At this point, I am leaning towards just living off the income from our Venue, postponing receiving Social Security for my husband, and keeping our Venue a few more years and then selling it.  I also entertain the idea of my husband taking his Social Security at 62 and then we would only need to come up with approximately 700 per month for living expenses.

Thank you all for taking the time to read this and I welcome any and all critiques.



« Last Edit: December 11, 2012, 02:59:01 AM by jimmygibbon »

RoseRelish

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #1 on: December 11, 2012, 07:35:32 AM »
It seems like you already have your $2k/month living expenses covered just by operating the entertainment venue...so delay taking social security as long as possible. That's a pretty solid return on the property.

tooqk4u22

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #2 on: December 11, 2012, 07:49:09 AM »
Sounds like your plan could work, but focus on the details and unknowns a bit more.  Health care, travel costs to/from for the one month, etc.

We own an entertainment venue that opens for 11 days per year and nets us between 35k and 40k per year.  The venue is valued at approximately 280,000 and it is paid off.  I had initially thought we should sell the venue and invest the proceeds from the sale, but we enjoy the 3-4 weeks annually of work required, and 35k seems like a good return on a 280k investment for now.  We would return to the states for approximately 1 month a year to work the venue.

Not bad for one month of work and that investment.....I'll give you $300k for it as I would hate to see you working in retirement :)


DoubleDown

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #3 on: December 11, 2012, 09:02:18 AM »
I think you have a great plan, congratulations!

I agree you should delay taking SS as long as your expenses are being covered by other forms of income like your venue.

Not that your plan needs tweaking because it already sounds plausible, but since I'm a bit conservative on wanting to have "enough" I would maybe just also have some other kind of potential income source in mind besides SS and the passive income generated by your assets, should you need it. That is, having some kind of skill you could always fall back on to generate a little additional income if you wanted (I'm sure you already have skills that are marketable since you're employed, but I mean something you might enjoy doing anyhow even if there was no pay involved). Or maybe some additional part time work here and there in your still-younger years to build your net worth up as the mood strikes you. Sounds like you could already generate some substantial additional income handing over knowledge/experience/contacts or consulting services along with the venue itself when you decide to sell.

kudy

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #4 on: December 11, 2012, 09:12:13 PM »
As you might have guessed, Im curious about the venue... as I am sure everyone else is here. Care to give a few more details on it? One month of work a year for that kind of money sounds awesome! I imagine you own the venue because you're a fan of the type of performance that gets put on every year? If so, that makes it even more awesome.

Hamster

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #5 on: December 11, 2012, 11:24:16 PM »
The "venue" sounds pretty amazing...

I can't help but think of something quasi-illicit during Mardi Gras... Or in Wisconsin, something at the State Fair??? Anyway, if you can net 35k, for a few weeks work, then it should sell for well over $280k. That's a 12.5% cap rate. I'd take an investment like that. I'd say keep it as long as you enjoy it. It lets the stache last that much longer and gives you more options. If you enjoy it, it also gives you a legitimate business excuse (tax deductible travel/lodging/food?) reason to come back and visit the mainland every year.
« Last Edit: December 14, 2012, 01:33:34 PM by Hamster »

lhamo

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #6 on: December 12, 2012, 03:57:00 AM »
Health insurance seems like something that could blow your living cost estimates out of the water, at least until state pools rev up.  Is that covered somewhere?

I hope you have very, very good insurance on that venue -- both for damage (something happening to it) as well as damages (should someone be injured on-site).  Congratulations on having made such a wise investment as long as the risks are covered.  Sounds like the proverbial golden-egg laying goose...

Having lived over a decade as a full-time expat, I'd also caution you to be careful about making long-term commitments until you are sure you like/are well adapted to living in a foreign country.  If you haven't lived long term in the DR before, you might want to make several extended visits before you sign on to a lease.  You might pay more up front, but you'll learn what to avoid.  Zoning laws are very different outside the US -- here in China, virtually non-existant.  When we first moved to Sichuan we saw some nice apartments that thankfully we didn't rent because it turned out they were above things like the local car wash, karaoke parlor, or hot pot restaurant.  Quality of life can deteriorate quickly depending on who your neighbors are.


LowER

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #7 on: December 12, 2012, 04:43:23 AM »
I know a couple who planned to do exactly the same thing. They did gads of research. Took several trips to DR to meet with a realtor. It was health insurance that stopped them. They are about your same ages. You might want to check out health insurance first.

jimmygibbon

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Re: Am I nuts? Is this doable...all comments criticisms are welcome
« Reply #8 on: December 14, 2012, 12:35:39 PM »
I have been told by numerous sources that ARS Humano Health Insurance is available for approximately 100.00 per month per person, depending upon the amount of coverage.  We just came back from another trip down there and met with quite a few expats who are older than us and are very happy with their Dominican health insurance and the services they receive at the Cabarete Medical Center, so, I hope we will be okay on that front.

As far as insurance on our venue is concerned, yes, we are fully insured. In the early 1980's the venue burned to the ground and my inlaws learned an expensive lesson at that time.  We are also required to carry quite a bit of liability insurance as we serve beer.

The venue is at a music festival that is only open 11 days per year.

Thanks to everybody who has chimed in thus far.....I appreciate any and all feedback.