Hello fellow mustachians,
We plan on soft firing in 2020 by leaving our jobs and moving to Costa Rica for 1-2 years after that is unknown, we could travel more, stay in CR, come back to the US or UK and set up our own business…always good to have options.
Background info…I’m 39, husband is 43, we have 2 kids ages 3 & 5. We both work in private estate management, & private chef before that we worked in private yachting. All our living expenses are currently covered by our employer. We have worked in the same positions for the same employer for 10 years. We have a LOT of perks, but also no flexibility or independence, we are burnt out, ready for a change and to spend some time with our kids.
We are good savers, I wouldn’t say super frugal, but definitely aware of our expenses and live well within our means. We live in a HCOL area, luckily we don’t pay rent, but childcare, food etc is high. We invest $100K annually and plan to hold $100K in cash when we FIRE.
Gross salary: $140K plus $66K annual bonus given as tax free gifts to ourselves and our children by our employer (s)
Taxes: 2016 – federal effective tax rate 15.9%, CA 5.4%
Rental property cash flow: 10 properties generating approx. $4-5K per month this fluctuates depending on vacancy and repairs, currently saving $1500 per month for capex, plan to stop this when we FIRE ($150 per property per month)
We own 10 rental properties, 1 in CA and 9 in MO.
CA property purchased in 2008, mortgage $262K, property value $600K, interest rate 4.1%, has a $100K HELOC – unused
MO properties purchased in past 2 years, 20% down, interest rates 4.5-5%, purchase prices approx. $70-100K
Wealthfront: $290K & Fidelity $50K in stocks
529 Plans: $150K
SD IRA’S: $150K – Peer Street 8-10% & Mortgage debt fund (PPR) yielding 12% for 3 years
Real Estate Syndications: $200K
One pays an average of $8K in annual cash flow for 8 years plus profit from sale, cash flow of other investment depends on the hold period between 3-10 years
Cash: $50K
No car loans, credit card debt, student debt etc
Plan on leaving our car at a relative’s house in case we need it if we return to the US.
We are reducing our expenses to boost our cash position, most notably, our daycare payments will reduce by $1K in August when our son starts kinder and then by a further $1K in 2019.
Our current net worth is approx. $1.3M
COSTA RICA BUDGET (work in progress):
Rent $2000 – hopefully less
Utilities $200
Internet & phone $100
Health Insurance $300 TBD
Food $800
Private school $1200 (plan to pay in advance for 1st year)
Travel $10k annual, plan 2 international trips per year to visit family in UK, Thailand & UK
Car $15K – cars are expensive in CR!
Gas Not sure how much driving we’ll do but gas is at least double
I’m really looking for help figuring out with the following…
- what should we be doing over the next 2-3 years to increase monthly cash flow with our $100K annual investing budget?
- how our plans will affect our tax liability
- what am I missing?????
- Will we be able to do it OR are we living in LA LA Land?!
Please chime I and let me know your thoughts, I need objectivity!
Thanks for reading and any help you wish to give,
Cheers,
Rachel