Getting Started: Part 1 - Go Homeless or Go Home!

I'm sitting in front of a blank sheet of paper, about to become homeless, embarking on a 20 day drive across the country, then a flight half way across the world, having just quit a job making a solid six figure salary.  How is that for a catchy story?  Well,  in some ways, that is the ending, not the beginning, so lets start at the beginning.

Jobs

Yeah, I hear ya buddy.

In 2012, I was sitting in a building, across from a man who would gladly scream at me for the smallest of annoyances.  I worked on a team doing software testing and was hired for this team not for my skill but my temperament.  I could take the screaming guy whom couldn't be fired.  I was talking to my boss about how I didn't think I could do this job forever.  I was feeling tired of work.  While not true of everyone, I felt unsupported and unloved by my team.  My work didn't seem to matter--no one valued it, no one supported it and no one else understood it.  You think with an attitude like that, I couldn't tell my boss, but he was telling me basically the same thing.  He was tired of the constant stupid he was dealing with-- politics at the time.  He had a C*O that was trying to tell him how to test, when he knew nothing of testing and wasn't even running the development organization well.  My boss and I had both worked together in the previous organization too, which had similar problems (but more so!), so we both "got it."  We decided changing jobs didn't work.  We needed to take on something more drastic.  So we both went looking for hope.

I spent my time thinking about other jobs, what could I do, what skills could I apply?  I don't know what all my boss did research wise or how he approached the problem.  I ultimately concluded I'd have to accept a job that paid a lot less, so I started looking for cash flow options.  I started to get a bit more serious about saving, but I still assumed I would need to make 20-40k a year.  I also started a personal mission of trying to make more friends, as I thought being less lonely might be some piece to the puzzle.  I will skip the details, but will say that eventually finding companions helped deal with the stress, but didn't eliminate it from life.

My boss found a job at another place and I joined him within 2-3 months.  It was better--people cared about my work.  It was wonderful.  It's hard to express how enjoyable the work was, but it was amazing what a difference job satisfaction can do.  The mission dropped in priority, However, in 2014 my boss discovered Mr. Money Mustache.  The 4% rule became a thing.  It was mind expanding, to say the least.  While I had grave doubts about the details of the message, I decided to pursue it.  I didn't drop my expenses to MMM levels, but I went from 45-55k a year spend rate to 35k a year in three years.  I later made it down to 25k, albeit excluding one time investment costs.  (For those interested in these details, we'll cover them in more depth later.)

Also in 2014 I went to a conference in Europe and had a vacation in Europe.  It wasn't cheap.  I really enjoyed myself, but at 109 USD in Rome and 114 USD in Florence for a night and 2+k for a ticket, I had to be realistic about going to Europe more than once a year was just impossible from a time off stand point and from a cost standpoint.  It would be easy to blow 10k for two to go to Europe and we're only talking about 2-4 weeks a year!  This was a problem I had to slay if I was to enjoy retirement with travel.

For the math nerds, here is the approximate costs broken out, assuming two people:
$4k - Two tickets to Europe, assuming you can't control the day you leave because you have a job...
$3.5k - Hotel for 4 weeks @ $115 a day
$1k - Food ($30+ a day), all eating out
$1k - Travel & Tickets (buses, museums, flights between countries, etc.)
$.5k - Insurance, emergency mobile phone, power plug converters and all the other travel stuff you really only use once then throw away. :(
Total: $10k

You will see how this absurd number can turn into 6 months out of an entire year of living in Europe, with enough discipline, patience and a bit of retirement.

One thing happened at work after my boss discovered MMM that was perhaps the most unexpected change in my work.  As a team we quit going to weekly (or more frequent) lunches since the boss quit going.  This felt like breaking up the team, we lost some of that closeness.  While the details don't matter, the team that felt like family and the work that was never the same after the family quit eating together.  I was being questioned about my value, about my design, about the complexity of the work and what I was doing.  The questioning wasn't all bad, but it was shock to the system.  I stopped working full time and really started just dialing it in.  I probably did about 15-25 hours of work a week.  In my spare time, I developed spreadsheets to track my expenses, estimate how long it would take to retire, etc.  I read everything I could get my hands on.  Eventually I moved on to my last work place.

I decided I'd work 1-3 years then retire.  I wanted to try one more idea I had to make an amazing job--I would build my own team from scratch, as a lead, in a place so backwards that my skill couldn't be ignored.  In summary, it only partly worked how I planned.  I was doing teaching, which was awesome, writing code which was fun, but I also was dealing with lots of politics and due to a lack of strategy I was only ever able to do tactics.  All the planning was for next month and none for the next 6-24 months.  I got a lot accomplished, but there was a ton left to do, things that I couldn't accomplish on my own.  I ultimately concluded it would be better to take time off than keep fighting in a way that was killing me.

And yes, work had been killing me.  In 2012 I was somewhere around 280 pounds.  Not lightweight, but not too massively heavy.  Since then, I gained 100 more pounds, about 10 pounds a year.  Stress was killing me.  Keeping control of my emotions, my reactions and being actively aware constantly how to respond to others, how to deal with screaming people, how to deal with being doubted, how to be political, was killing me.  This is not to put blame on others or my job, but the reality of being me and the strain it puts on me.  It is said that there is a limited amount of self control one has.  I was able to highly disciplined at work, but at a cost.  So in order to align goals I decided to limit my time at work.  After just a little less than 2 years, I quit my 120k+bennies+bonus a year job.

Wait, what about the travel, the driving and homelessness?  Patience... :)

Investing, Housing and The x% Rule

So, first we have to understand the 4% "rule".  Typically it is done with some mathy, investmenty way, but for now I'm going to convert it into a way easier for those who don't want to do math to understand, using only -, +, *, / operations.   In effect, the 4% rule says you need to save 25 times your yearly expenses in order to retire for 30 years safely.  If you subscribe to the 3% rule you need to save 33 times your expenses to retire forever.  While debate rages about when the 4% rule is appropriate, it is a nice simple bit of math.  Need 25k to live for a year?  25,000 * 25 = 625k (Or 25,000 * 33 = 825k) for the 3% rule.  Alternatively, you can make income to replace expenses.  So for example, say you need 30,000 but make 10,000 in hobby income.  That puts you down to 20,000 for 660k at the 3% rule.

These rules are meant to be a rough guide, not an exact science and they are mostly currency agnostic.  If you want the deep analysis of this, your going to have to wait for another post or 10.  I could try to justify which rule makes more sense, but for this set of purposes, it doesn't matter.  I could discuss 401k money, pre vs post tax money and investment strategies.  These are important, but not for a life overview.

So now knowing said rules, my goal was to hit the 4% rule with a need to make 10k to hit the 3% rule.  I also wanted backup plans, which I can get into in another post.

For the next two days, I will be living in Idaho.  My grandmother lives in Maryland.  I have a few things keeping me in Idaho, my car and my house.  I also have family in Idaho, but that is a totally different topic for another day.  My house is sold in two days.  

In order to live on relatively small sums of money, there are many paths to frugality.  However, there are basically for big categories every person must consider: Housing, Transport, Utilities, Food/Basics.  When I bought my house in 2011 my house cost ~100k after bank loans and fees.  My house is selling for 255k.  A tidy profit, for sure, but my area of Idaho is gentrifying.  Without talking through the details, two major future possibilities may occur in Idaho housing.  Either California/Seattle/Portland invaders will stop and housing prices will go back down or they will keep coming and price pressures, including all four categories list above will continue to go up.  For the frugal minded, both options look poor.

Furthermore, having all my money locked into housing makes it hard to invest and use for travel.  Granted any asset class can go down, but most asset classes don't remove all diversification (e.g. 1/3 of my money invested in one physical location).  I could have rented my house and used a management company.  Roughly, the equation would have been 1500*12= 18k in rent minus 50% in taxes, fees, repairs, time spent finding a renter, etc. or 9k a year.  Interestingly, that is about 3.5% return, not far from the 3-4% rules.  So if the growth of the house value was positive, it would have hit the 4% rule, perhaps even more than that, but with low diversity, high risk and the pain of managing a management company from Europe.  No thanks!  So house must be sold. [Editor's Note: It has been sold.]

Road Trip

My car will be going with me in part because I bought it new 15 years ago.  I know its quality, it still runs good and why sell it for 1k when it works well?  Its worth more than that to me to say nothing of the 600 dollars tickets would cost to fly to Maryland.  I have time now, not money.  I also get to see some nifty sites and while I will end up spending ~60 a day in airbnb and probably 30 a day in driving, that is only 1800 for 20 days + food.  So make that ~2k for 20 days, or ~3k a month.  When I stay with my grandmother for a month, the cost will be ~1k.  1k + 3k for two months would be an average of 2k a month or 24k a year.  Granted this doesn't scale forever, I wouldn't want to stay at my grandmothers for 6 months of the year, but it doesn't have to.  It only has to scale for two months.  In case your getting ready to be offended that I'm cheating my grandmother, don't, I'm visiting to go help her, fix some stuff at her house, etc.  Things I wanted to do but never had the time to do because of work.

During our road trip, we want to spend time in several places in the mid west.  Since doing European trips in 2014, 2015, I decided to limit my vacations to the states: places that were cheap to visit.  I went all around the west coast because I planned this trip, thinking at some point I'd go visit east to head to Europe.  So heading east I want to stop at the big Midwest Americana places.  The Mall of America, Mount Rushmore and Grohmann Museum are a few examples of places we want to go to.  In my somewhat more freedom oriented approach, I intend on not having a fully defined schedule, just that I expect to take 3 weeks to go from Idaho to Maryland.  Then the car gets a rest while I stay with my grandmother for 3 weeks.  Then its time for:

Europe

No, not the band silly.  So before going into the plan, let's take a brief second look at my first trips.  In my first trip, I spent 3-5 days in the Netherlands, to go to a conference.  It was partly paid for by work, although I still put in a ton of cash.  The first two days were just recovering from 9 hours of jet lag.  Then life got livable again and I enjoyed the Netherlands. But I only had 1 day before the conference...  I then spent 13 days in Italy: 5 days in Rome, 3 in Florence, 1 in Venice.... It was as if I was racing as fast I could go just to see how many places I could touch.  That isn't traveling, its insanity.  Not to say it isn't fun to be insane, but it isn't great.  In my next visit, I went to the UK and traveled so hard that I did 1300 miles in less than 2 weeks.  It was fun playing speed zoo, "we go fast!", but it was exhausting leaving a desire for a vacation from vacation.  So, how do you fix that?

Enter Slow travel

Slow travel is where you stay somewhere for a good long while, but you still travel.  In this case, it will be 30+ days per location.  Due to the laws in most of Europe, we're limited to 90 days in a country.  In the EU, specifically the Schengen Zone, there is a 90 days limit for all the countries.  While not precisely the rule, effectively the 90 day limit resets after staying out for 90 days.  Therefore, if I spend 90 days in Italy, I must then spend 90 days somewhere like Croatia, Cyprus or the UK.

So that is the plan.  Spend 90 days in Italy, 40ish in Florence and 45ish in Rome.  Then go to Croatia, specifically Split.  Stay there for about 90 days then return back to the EU.  We're debating if it should be Italy again or Spain or ... but that's not the point.

But wait, what about the budget?  What about the weather?  What about ...  Well, at nearly 2500 words, this is getting a bit long.  So, let me leaving you with a bit of a teaser for next time:

Do homeless people have spreadsheets?

Is study of art, culture and enjoying nice weather during winter appealing?  How about for 500 a month?