Has it really been over a year since our last week-long family beach trip to the North Carolina coast? We just returned from this year’s NC getaway and after re-reading Vacation Motivation I could simply re-post it as I’m feeling pretty much the same now as I did back then. Although I feel even more depressed about having to go back to work this year than I did last year. I think that the closer we inch to financial independence the less I want to be stuck in this cubicle hell.
Vacations provide a fleeting taste of freedom that we all crave. For a few days we own every minute of our time free to do whatever we please. When we pack up the car to drive to our rental the only baggage we bring is what we need for a week: clothes, toiletries, baby gear, beach gear, groceries, adult beverages and bikes. All other baggage is left behind: 9-5, commuting, projects, deadlines, technology, cubicles, lawn maintenance, home maintenance, car maintenance, daycare, shopping, investments, bills and hundreds of other little things that make up The Daily Grind.
This year we rented a 3 bedroom 2 bathroom condo steps from the beach that was a great fit for our families. My mom and my sister shared one bedroom with two beds, my niece and nephew had their own room and my wife and I were in the 3rd bedroom with our son in a pack-and-play. At $1,900 per week it was cheaper than renting a house. Most houses in this price range were further away from the beach and didn’t have a pool, which was a big hit with the kids.
It was raining the first couple of days and yet we all kept saying how relaxed we felt. No surprise really – I’ll take a rainy day at the beach over a day in my cube anytime. Surf fishing was great and I caught enough for all to share fried Spot and Croaker for dinner. And of course a Bloody Mary sipped on a balcony overlooking the ocean tasted just as great as it would on a sunny day. Once the rain cleared up we spent most of our time at the beach.
And just like last year, before we knew what happened it was time to leave. We drove back mostly in silence mourning the fun we were leaving behind. Pulling up to the house we saw that crabgrass was taking over the front lawn again. The lawn itself needed to be mowed badly. Several trees and bushes were out of control and needed pruning. Inside the house ants were marching all over the kitchen like they owned the place. Our cat shed so much hair all over the house that I could’ve made a second cat out of it… You’d think we were gone for a month instead of just 7 days.
Welcome home to the life you designed for yourself over all these years! Now quit complaining!
After wasting most of the Sunday on all sorts of maintenance we went to bed knowing that in the morning we’d have to restart The Daily Grind – work, daycare, commuting, cleaning, maintaining, spending…
Before I left on vacation my boss said “have fun and come back to work recharged”. Yeh, right! The only thing vacations recharge is my desire to evaluate if we’re doing everything in our power to get out of the rat race.
Reflecting on the year since our 2013 summer vacation I concluded that we’ve done well financially. Our only debt – our mortgage – has been paid down by more than $50,000. We saved substantial amounts in our retirement accounts. We finally funded our son’s 529 college plan with a solid contribution. Combined with strong market performance our net worth increased significantly. I can’t really think of anything else we could do to get to freedom sooner.
Or can I?
Freedom is not all about money. Freedom is about choices. You can achieve financial independence but still not be free. If you’re financially independent but living in a mansion with 3 cars, a boat, and other upper middle class toys and liabilities you’re still limited in choices you can make. Deciding to take two months off to explore South America, for example, becomes much harder with all the maintenance that does not take vacations.
For us the biggest (quite literally) elephant in the room is our 3,200 sq. ft house. We are about a year away from paying it off so there is a ton of equity locked up. Neverending upkeep inside and outside – all DIY so it’s time consuming. High carrying costs will continue even after mortgage pay off – bigger house, bigger expenses. Three of us certainly don’t need 5 bedrooms and 3.5 baths. We’d like to have 2 kids but all that space is still an overkill.
Yet there was a reason we bought this house – great location, great neighborhood, great lot, best schools, big garage for DIYcar maintenance, room to spread out, newer construction that fits our lifestyle and a community swimming pool with a gym. We like living here even if it does feel a bit over the top. With zero consumer debt and the mortgage balance to be paid off within a year we can without a doubt afford it financially.
However, vacations tend to have a funny way of making me reexamine our cushy lifestyle.
Fact: If we sold the house and moved into our rental condo we’d be free to get out of The Daily Grind today.
My wife could stop working and stay home with the kid(s) which is something she wants, especially if we have a second child. I could find another way to earn money instead of continuing my current job which is high-paying but not very fulfilling. For example, I could stay in the same field but do shorter contract gigs using the time in between for things we both enjoy like travelling. The earlier example of taking two months to explore South America sounds very appealing. I’m not opposed to working, I just want more time off.
Our condo is 980 square feet with 2 bedrooms and 2 full baths. There is a large utility room with washer and dryer, walk-in closet in each bathroom and a storage closet on the balcony. It’s in a great location right next to a big park and in a good school district. There is a community pool, gym and sauna. It would work now but get tight really quick if we had another kid.
At the same time, my sister and I grew up in a much smaller 2 bedroom 1 bathroom apartment sharing one room and our parents never complained about space. We as kids didn’t care one bit – more reason to be outside all day!
But I’ll admit that it would be quite a shock to downsize from our McMansion to the condo. Problem with lifestyle inflation is that your mind resets “The New Normal” baseline at each subsequent level making any backward move a somewhat traumatic experience. It’s a one way road and making a u-turn is bound to cause an accident.
I half-jokingly ran the downsizing idea by my wife. Only half-jokingly because our long-term tenant just gave me a 60 day move out notice. Makes for a pretty smooth transition. Hmm, is that a sign or what?
After living a single family home lifestyle for a decade condo living sure seems easy. A low monthly HOA fee covers water, sewer, trash, landscaping, pool, gym and sauna. Electric is the only bill you pay and it’s also low since all the units around you help with cooling and heating. There are almost no maintenance headaches – no need to worry about leaky roofs, mowing or Xeriscaping. If you want to travel just lock the door and rest easy knowing that upon return everything will be just like when you left it. Safe and sound, no overgrown crabgrass lawn and probably no ants. With a paid off mortgage our total housing expense can easily be under $400 per month.
Half-jokingly or not, we did talk about it. I always said that I’m keeping the condo as a backup plan in case shit hits the fan. But what if this is our Get Out Of The Rat Race card? Now?
Several questions came up. Can you guess which lines are my wife’s and which ones are mine?
Q. It’s too small! There is no way we can live there comfortably with two kids.
A. Me and my sister shared a bedroom in a much smaller apartment. We turned out OK.
Q. How can we live without a garage?
A. We did before.
Q. Where will our family sleep when they come to visit?
A. My mom and your mom have big townhomes.
Q. How will we raise our children without a backyard?
A. There is a park with several well-equipped playgrounds, 2 lakes, walking trails and soccer fields literally less than 50 yards away.
Q. What about all the improvements we made to the yard? All the trees you planted that are just starting to mature and provide privacy we wanted.
A. Sunk costs.
Q. I couldn’t live without my garden!
A. Hmm, garden at our mom’s yards?
Q. We have so much stuff and I hate moving!
A. Agreed – we have too much stuff. But we’ve been cleaning out the house on Craigslist and look – we just sold the pool table yesterday. That’s huge! Lets sell more stuff! And yeh, I hate moving too.
In the end we decided to stay put… at least for now. The beauty of consistently saving over 50% of your net income is that you start seeing options open up long before you reach the actual Financial Independence. Our almost paid off house IS an investment despite what most financial advisers tell you. We just need to be open to selling and converting equity into income producing investments. No, we are not ready to do it just yet but the option is now on the table. Maybe it won’t be the condo but a slightly bigger 3 bedroom beach cottage that we downsize into. Maybe we’ll just stay in our paid off McMansion after our second child is born relishing in all the luxury and space. Who knows?
I know one thing – I love realizing that as time goes by our choices of how to live our life are expanding. Doing The Daily Grind while knowing that it’s optional casts our current life in a totally different light. That’s freedom and that’s something to look forward to.