My Financial Freedom Ducks Are All in a Row!

This is really great.  I finally have got my spending, income and investing ducks all set up for financial independence.  Hey, folks!  I am FREE!.

The last piece of the puzzle just fell into place.  With the help of cash I just got from selling some vacant land, I have eliminated my mortgage payment.  This in turn has dropped my gross annual living expenses to a mere $15,000 after taxes.  And, since my gross “passive” income is $53,000 a year, I’ve got a whopping $28,000 after taxes available to spend for fun.  Whoppee!

Before we start getting into details about the kind of living I (or you) can do on $15 thou a year net, and the specifics of my income stream, I think it would be a good idea to give you some context about my situation.

I am a 65-year-old guy living in Virginia.  (I know, I know, 65 is not early retirement by any means.  BUT I only started hands-on planning for retirement 4 years ago.  So I think that’s still pretty good.)  My working career included jobs in chemistry, marine science, sports diving, marketing, advertising, management, and non-profit administration.  And now I spend my fun time hiking, biking, reading history, exploring civil war battlefields and national parks, blogging, watching movies and playing computer war strategy games.

Now, where’s that $53,000 a year income coming from?  Here’s the breakdown: $20,000 from Social Security, $27,500 from stock dividends and bond interest, $1500 interest from peer-to-peer lending, and $4000 from a little consulting side hustle.  Why take social security now… what kind of investing is that… consulting how… I’ll get into all of that later on in other posts.  Right now, let’s keep this moving.

Now, what’s that $15,000 a year ($18,000 a year before taxes) getting me for a basic lifestyle?  Well, let’s see.

I live in a two-bedroom, full basement 1100-square-foot house on 1.25 acres, with a nice big attached garage and workshop — and no mortgage because I made sure to pay it off before retiring.  I eat just fine, thank you, with lots of meats and vegetables, and no keeping-the-cost-down reliance on pasta, or rice-and-beans.

I’m insured up the wazoo (or so it feels).  Okay, I do have Medicare, (which I’ve been paying for through paycheck deductions over my entire working career) but I’ve also made sure to have supplemental coverage to keep my retirement stash safe from hospital-cost-threat.  Same goes for insurance to cover long term care, personal liability, the house, and my pick-up truck. (Nope, no life insurance; my wife and I agreed we no longer need it.  And yes, my wife carries her own auto insurance on her own vehicle.)

I’ve got a 1996 Dodge Dakota extended cab pickup truck in super good shape –and no loan payment.  And I already have all the hiking, biking, computer, photography, workshop and what-not toys I could want. (Although I’m looking to buy an astronomical telescope!)

Oh, yes.  That $15,000 a year net includes reserves for auto maintenance and repairs, home repairs, and pet care.

And here’s the typical “basic” day I get for my $41 (times 365 days = $15,000).  Get up when I want (usually just after first light) in a paid-for house, enjoy my breakfast without any time-pressure while listening to classical music, surf blogs a little, then spend an hour or so managing my stocks and bonds.  After that, go do something physical (in the workshop or on the grounds) until lunch.  Then I’ve got 4 hours of totally open time to have fun hiking, biking, computering, netflixing, taking an online history course, blogging, etcetera. (And none of that costs me anything over and above what’s already included in my $41 a day basic living cost.)  Right around 5pm I get back to my “work” desk to do some home administration paperwork until it’s time to cook up and enjoy a steak/ chops/ ham/ chicken/ fish dinner.  After that, it’s hang-out time with the dogs and the cats — while doing some more reading or netflixing or pc game playing.  Not a bad deal, I think, for $41 a day!

Of course, I’ve also got another $2300-plus available each month in discretionary income to spend on anything I please. But, as you’ll see later, most times I really have to work at finding something to spend that money on.

Yes, all right.  What does it take to keep those basic living costs at less than $1250 a month?  I’ve always been a thrifty guy. (My wife sometimes thinks I cross the line into skinflint territory.)  But I have to give a big, big thank you to Mr. Money Mustache and his blog ( for really opening my eyes to just how much you can lower your living costs by pursuing a strategy of what I would call no-sacrifice frugality.

Inspired by Mr. Money Mustache, in the last few months before actually retiring I lowered my annual costs for stock trading by $1000… for phone/internet/tv utilities by $750… for debt interest costs by $2700… for electricity/propane/fuel oil by $750… and for a stack of other miscellaneous budget line items by $850.  That’s over $6000 a year sliced off what used to be my living costs before I pulled the retirement trigger!  Without giving up any comfort, convenience, or capability.

More on how all that got done later, too.

And so now here I am, planning and carrying out adventures with my annual $28,000 spend-for-fun discretionary money pot — or enjoying my basic $15,000-a-year lifestyle when I’m not.

What about YOU?  When will you be able to set yourself free?  What will it take?  How could you make it happen sooner? Please post a comment and let us know!


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