Pura Vida 2020

Ever since our son was born five years ago I’ve been thinking about The Great Escape. Something changed at the hospital when I held him for the first time. There is a clear line – the Before and the After. Everyone said it would be life changing but I didn’t understand just what that meant, for me. I didn’t think it would be this life changing. Something clicked that made me realize what really matters in life. The job, the career, the house, the material possessions all took on a different meaning. The concept of Enough made its first appearance. Escaping the rat race became The Mission. This year we will pull the trigger on something that will change our comfortable suburban 9-5 life forever.

The House. The equivalent of a financial elephant in our net worth room. Half a million dollars in equity that would go a long way towards financing The Great Escape. Half a million dollars in equity not doing much besides keeping up with inflation. Big house, big expenses.

Does it seem reasonable to have Three Thousand Two Hundred Square Feet of space occupied by three people and a cat? Are we serious about pursuing Financial Independence when one of our largest assets is deployed so inefficiently?  

On the other hand, this house has been our home for close to a decade. The longest we’ve ever stayed in one place by a long shot. There is no denying that our house is comfortable, spacious, convenient and within a top rated school district. Our son will start a “ten out of ten” school this fall. We can bike there in 2 minutes. 

I remember driving through this community 15 years ago admiring all the landscaping, walking paths, lakes and amenities such as pools, tennis courts, basketball courts and playgrounds. How lucky are those who can afford to own a house here! Back then we lived in a rented apartment and could only dream about buying a house in a neighborhood like this.

Not only did we buy a house here but we paid it off. We’ve been mortgage-free since Cinco De Mayo 2015. Great income, big house, no mortgage, two cars, two stable jobs, overseas vacations… Is there really more to life than that? By every financial measure we’ve made it. We can cruise to retirement at 67 as noted on the yearly statement from the Social Security Administration.

Freedom is the next step and freedom must be bought. It has a steep price tag – Financial Independence. The Mission is to have enough assets to make leaving our fluorescent cubicles behind a viable option.

What is Financial Independence?

For some people FI means being able to live off the 4% of their assets without having to work, indefinitely. That’s a fine way of looking at things but my definition is slightly different. To me FI means being able to eliminate the need to continue working a high paying job. It means being able to substitute staring at the computer screen all day for doing something else. Even if that something else is paying a lot less money or doesn’t come with a reliable paycheck. I want to find the key to the golden handcuffs.

If I stayed in my current field of information technology, I wouldn’t mind freelancing half a year to bank some money and then doing whatever I want the second half of the year. Or be able to quit IT and switch to something completely different like real estate, property management, handyman services, Uber driver etc.

After two decades working 9-5 with 2-3 weeks off each year it seems like a good time to experiment a little.

The good news is that we’re almost there. We’ve been consistently saving 60-70% of our income for a while now. Our retirement accounts are on track to provide comfortable living once we turn 59½ i.e. the age when we can start withdrawing from those accounts penalty-free.

The way I see it – I have 15 years to experiment between when I turn 45 in 2020 and 60 in 2035. By all calculations our 60+ years should be covered with what we have set aside already. We just need to let it compound and grow.

That’s where the concept of Enough comes in. If we are all set for traditional retirement in 2035 why not experiment a little while we’re still young? Why keep on chasing the top dollar? 

Pura Vida 2020

Any mission needs a name. My goal is to be able to declare ourselves financially independent in 2020 – in the context of FI as defined above.

2020 is a round date that’s fun and easy to track. I’ll turn 45 in 2020 and feel that the 15 years between then and the magic age of 59½ could be a fun time to experiment with freelancing, semi-retirement, alternative money-making hobbies etc. In our 40’s and 50s we should still be in our prime and up for anything, including extended travel and adventure.

Our family trip to Costa Rica had a big impact on me. I loved everything about the country – nature, people, authenticity, values… The concept of pura vida, pure life, left a lasting impression.

Eliminate the distractions to illuminate what really matters.

That’s my take on the concept of pura vida. We seriously considered moving to Costa Rica. I know everyone says stuff like this but I really meant it.   

The Mission’s got a name and it’s Pura Vida 2020.

Working Through the Options

There are moves we can make now to hasten the arrival of FI. I outlined a few options in this post. To summarize:

Option 1: Sell the big house and move into a rental condo that we own.

Option 2: Sell the big house, keep the rental condo and buy a top or a bottom floor apartment in the same complex.

Option 3: Sell the big house and buy a smaller house in the same neighborhood.

Option 4: Sell the big house and buy a smaller house in a different neighborhood closer to the city.

Option 5: Sell the big house, buy a similar size house on the Outerbanks, NC and rent out part of the house for income.

Option 6: Sell the big house and buy two houses on one plot in Costa Rica. Live in one house and rent out the other one to tourists.

Option 7: Keep the big house as a rental combined with one of the first 4 options.     

Option 8: Enjoy the status quo.

This is just the latest version of the list and it’s subject to change.

Of course a list of options is valuable only to the extent that it’s acted upon. It’s easy to start feeling warm and fuzzy about having options while never actually doing anything about it. A list like this can become a crutch that makes going back to the daily grind easier… in perpetuity. Look, we have The List right here! We’re already working on changing our life!

I’m happy to report that there’s been some significant progress.  We have worked through some of these options not only in theory but in real life. The list is much shorter now and it’s time for an update.

Stay tuned to learn about our Pura Vida 2020 moves!

 

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