Hey all, my uncle, who is FI and has always owned his own businesses, turned me on to MMM's blog back in October, and I have been following ever since. This forum is great, good to bounce ideas off like-minded people. I look forward to offering advice on the DIY forum, as I am a carpenter by trade.
Anyways, my wife and I are both young people (I'm 26, she's 23) but have always worked, etc. We are already pretty frugal, which is a little hard here in Canada with a high COL. I am American, and unemployed now while waiting for my residency papers to come through. I worked under the table for a while, and am going to be starting a new project for our landlord, which will carry me through to legalization, where I have a secure job waiting. My wife is an art teacher at a children's art studio, also a stable job.
The problem is, these jobs are relatively low paying. She is at $15/hour, and I will be at ~$20/hour. Works out to about $4500/month. Our rent is $850, and we are renting a large garage on the property for an additional $425, which we will use as a workshop for me and as an art studio for her. She will be running some classes to help offset the cost for the space.
Other expenses are in check: Even with me not earning any money now, we only have to dip into the savings for purchases liek dog food (70$/6 weeks). When I am working, we will be able to live on my salary alone, thus saving 2k/month, or about 45%. We have NO debt, although we both own cars. She needs hers to get to work in a different city, and I need my truck for work. Her's is a 99 corolla that gets 30mpg, and mine is a 98 4Runner that I get 21 mpg out of. Not ideal, but necessary. No CC debt, no student loans, nothing.
In terms of savings, we have 8000 in cash and I have 15k in childhood investments set up by my parents. Not much, but not bad for us going through moves, immigration, and setting up our first real home.
In the future, she wants to open her own studio for children's art. I would like to work for myself, renovating a few houses per year, or perhaps building 1 or 2 from scratch to sell.
Now, after that long-winded background, here is my question: She is basically ready to start her studio whenever the opportunity presents itself. I will work for contractors for 4-5 more years before I am ready to really tackle my own endeavors. We live in the Greater Toronto Area (close to Hamilton), home to some of the most ridiculous housing prices ever. Houses here average 350k, with the very cheapest in gritty parts of Hamilton being 200k, and standard SFH breaching up over 650k. We really like a town that is about 30 miles from where we are (Guelph, Ontario) where comparable houses can be had for ~250k. We see ourselves buying there, only question is timing.
So, if you guys could go back to your early Mustachian days, would you:
1) stay the course and keep renting and try to save as much as possible, with her keeping the stable job she has or
2) would you take a little risk and buy a cheaper, fixer-upper in an upcoming town. She would open her studio from the house, and I would find a job with a contractor up there, which I am confident would not be that difficult. Only way it is feasible is through help form my parents, who, presented with a logical, well-researched, informed, and realistic plan, will be willing to help.
I am encouraged by our current spending habits, as we have been able to keep our entire budget to ~2500/month, including lots of gas to BOTH drive to Burlington (15 miles) to work every day, and that any mortgage payment wouldn't be much more than our current 850 rent, and certainly less than our total rent of 1275 for the extra space. She would be getting her studio started faster, and it would be very efficient to run it out of our home. I am aware of the zoning regulations, so finding the right property would obviously be essential. I am also encouraged by my ability to get jobs, which I have done in both the US and Canada, and that my income is going to steadily rise until I go out on my own.
Only downside is the heavy reliance on parental funding. Some part of me feels like we should wait it out and get 25-35k saved over 2 years and see what happens. Downside to that is, I feel like this town we are thinking about is on the verge of blowing up in real estate, as young people look to relatively close towns that are affordable to buy in, and the same opportunity that is here now will not be there in 2 years.
I tried to word this post as clearly and concisely as I can, but it is very hard to sum up your financial/professional/personal life in a few short paragraphs. Much respect for the writing skills of MMM and all of you on this forum. Let me know if you need any clarification
On with the suggestions!
