A Brief Sabbatical

This past week I started floating my resume out, goose-stepping my way into some possible temp work. The past few months have been nice. Since I finished rehabbing my last rental property in January and got a new tenant in place I haven’t had much of a to-do list. I spent three weeks in West Africa in March upon an invitation from a friend of mine who’s originally from Ghana and was going home to visit family. I was treated like a part of his family, put up in nice homes and fed a lot of home-cooked meals. I came home with a deeper appreciation for those of you who plan to retire abroad, or have already done so. I see the attractiveness of it, I do. It’s adventurous, exciting, and a chance to make everything new, including yourself. But for now and in the foreseeable future, I’m happy with my home where it is.

I was also able to tag along on a road trip with a group of friends to Miami, Myrtle Beach and as well as a couple of nights in D.C.. We split all the costs four ways, took turns barbecuing the majority of our  meals on the beach, and shared hotel rooms, so the expense was minimal.

Since the weather’s improved over the past couple of weeks I’ve been able to take my bicycle out on some twenty to thirty mile rides. It turns out that over the last few years while I was adding digits to my bank account, and letters to the end of my name, I was also adding some inches to my waist. So it’s been nice to be able to reignite my more active hobbies. I’ll be outside in the next couple of weeks tearing up some grass to make room for a summer garden. My father offered to loan me his roto-tiller but I told him I’d rather take a stab at doing it by hand.

Financially everything is going fine. But I do want to increase my passive income some more. I’m comfortable where I am and it’s not a bad life at all. But I do feel a bit exposed just getting by. If I ever had a problem tenant things would be tight. And there are some projects I’d like to do that I couldn’t afford right now. Like building an alternative energy vehicle in my garage, getting solar panels, maybe heating my house with thermal solar vacuum tubes coupled with a massive underground heat storage system. – You know, fun stuff.

So right now I’m financially independent. But I’m not ready to call myself retired. This is more like a brief sabbatical. I do expect sometime in the next few years to be in a place where I’m 90% sure I’ll never take on a “regular job” again. Even then there will be a good chance I’ll do things like handle a few legal cases, rehab another property if I find a good deal, build stuff and wind up selling it at a profit, maybe start a part-time business or help a friend with a business of theirs.

The nice thing now is, when I do get some work, 100% of my earnings can go towards investments, since I can afford to live off of my rental income. I’m hoping to land a 6-12 month gig, or maybe a couple of 3-6 month assignments with a break in between. I’m definitely not done with real estate, since there are still good deals around and I think they will continue to be around for at least another year. I’m not sure if my next purchase will be another long-term rental, or something I try to rehab and put back on the market for resale. It’s going to depend on the work I find and what kind of real estate deal I fall into. I like to remain flexible so I can just take the best deal available rather than shoehorning my way through the steps of a meticulously laid out master plan. If I find a good deal on a property that would make a good rental, I’ll go for it. Or if I find a good deal on a property that would work better being rehabbed for resale, I’ll do that.

In the meantime I’m just going to keep my hook in the water. And while I’m waiting for a bite I’ll be taking the bike out, getting the garden ready, and building the calluses on my finger tips with my guitar fret.

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7 Comments

  1. Chenda
    Posted April 23, 2013 at 2:20 pm | Permalink

    Very wise to keep increasing your net worth; you’ll only get richer and more secure as time goes by.

  2. Posted April 23, 2013 at 6:57 pm | Permalink

    Mike, the good thing is you’ve bought property before so you know what to look for. Secondly, you have the patience to find the deal you’re looking for. That’s a great position to be in. Most people would never have the courage to do what you do, let alone to actually do it.

    The deals you’ve found used to be readily available in SoCal, but no longer. It may end up being the case with you too by the sound of your post. It does appear that one more property would really put you where you’ll be comfortable.

    My wife is an attorney and will be retiring this year. She likes to work and she’ll have more than enough side jobs to keep her happy. (Just appearing in court for the lead attorney and stuff like that)

  3. Posted April 23, 2013 at 10:28 pm | Permalink

    Mike, I’m sure you’re aware of this but thought I’d bring it up.

    You can live in a property for 2 years, sell it, and keep the proceeds up to $250,000 tax free as a single guy. Rinse and repeat every two years and keep reinvesting your money.

  4. Spoonman
    Posted April 25, 2013 at 1:22 am | Permalink

    Welcome back!

    I’m very envious of your current position. You are FI and can take your time deciding how to proceed with your life.

    Your post has gotten me thinking about working an extra year or so to augment my passive income a bit more before pulling the trigger. It’s impossible to predict how my future self will react to an early retirement with little disposable income, but it might be a good idea to give myself some more options by working a bit longer.

    Nice to have you back!

  5. Posted April 26, 2013 at 12:32 pm | Permalink

    Good stuff. I strive for the “don’t have to work” point myself, and I think that once you’re (general “you”) are at that point, you become a far better employee. You won’t hold back honest opinions for fear of your job. You’re there because you enjoy it, not because you need to eat, etc.

    I totally get the fun stuff you mention. I’d love to get a house to outfit with triple pane, argon filled windows, PV cells on the roof and maybe even PV siding. Solar hot water/heating would be fun too. A PassivHaus would have to be built from the ground up which would be pricey so retrofitting an existing house one season at a time would be a blast. Filter/heat-exchanger, open cell spray foam insulation in all exterior walls, air return with filter in every room so even with closed doors air circulates everywhere.
    Dual flush, low flow toilets, heating coils in the floor (coupled with solar heated water!) etc.

    Building an electric car would be an amazing project. Limited (passive income) funds might slow down a project like that. To get an idea of what’s involved, read this guys VOlvo conversion: http://www.electricvolvo.com/ElectricVolvo/EN/EN.html

    The upside is that you can pick any car you like and make some pretty cool car into an electric. I’ve had the idea of maybe finding a wrecked Prius and transplanting the Prius guts into an old Volvo 145 or something. I’m talking dash and controls and all. That way you get a nifty and proven hybrid system and things like A/C (I’m stuck in Texas for now!) and power windows.

    Of course, it’s a dream and a costly one, but it’s still fun to think that at some point, I might get a job flipping burgers just to make that my conversion budget – powered by burgers. hah

  6. Posted April 26, 2013 at 2:43 pm | Permalink

    Mike- I found your blog via jlcollins and just wanted to leave a note of appreciation for your writing and work here on this blog. I’ve been reading some of your old posts and finding familiar mileposts along the way:

    The story of Paul’s death reminded me of my father-in-law’s rapid decline and death from pancreatic cancer, which served as a huge wake-up call to me in how I spend my time. I am sorry for your loss of this great friend.

    The post on Work Ethic made me wonder if you’ve ever read about Potlatch ceremonies and their ban by the U.S. and Canadian governments. If you are unfamiliar, you may find the topic interesting.

    The post on Idle Kings included a great piece of art that is used on the cover of John Williams’ book Stoner, which I highly recommend. It has nothing to do with marijuana, but quite a lot to do with work, jobs, responsibibility and freedom.

    Finally, I can only honor your candid discussion of addition in your posts about the Low Point. I wish you well on everything that followed from that experience.

    Keep writing; you do it well.

    Best,
    TallMike

  7. lurker
    Posted May 5, 2013 at 10:48 am | Permalink

    hope not “goose-stepping” yikes those are bad jobs for the world as we know it….perhaps you meant “tip-toeing”
    best.