All right, I must warn you; this is a little bit of a weird post. I’ve been thinking about this scenario for about two months now. Maybe it’s the sun beating on my head too hard, or maybe it’s just a funny thought that will evaporate into thin air in a few weeks. Or… maybe I’m really tired about this whole crazy lifestyle where you have to run from 5am in the morning till 10pm and hope to have a good weekend to recharge for the next week. Anyhow, I wanted to have your feedback on this crazy plan.
Where I’m at right now
But before I share my plan with you, I need to tell you where I am at in my life. I’m turning 33 this fall, married and have three kids (2, 7 and 9). I work for a big financial firm, making slightly over 100K per year with a fully funded pension plan. Technically, I have nothing to worry about as my financial future is well assured.
My investments look like the following:
$8,000 in a RESP (kids’ savings)
$2,000 in a TFSA (Tax Free Savings Account)
$52,000 in a RRSP (my RRSP + my wife’s)
Total of $62,000
If I sell everything I have (mostly my house! Lol!) and pay all my debts, I will have around $100,000 in cash. I’m not counting my pension plan in the equation as I wouldn’t be able to withdraw from this account.
Yes… this is what I’m thinking; selling everything I have and change my life forever… After all, I’ve told all my friends I would retire at the age of 35… it’s about time to think of a plan! Lol!
Selling Everything and Go Live in an RV
By selling my house, I would have enough to buy a used RV big enough to meet my family’s needs. I don’t need much comfort or luxury as my dream would be to go across Canada, then the States and finally go down South and settle in Costa Rica.
Living frugally, I could probably only use my website income to pay for my few bills. The best part is that I could work 3-4 hours a day on my website and increase this income month after month to eventually make a substantial income from my site and still have very small expenses.
I’m not too excited about living in an RV to be honest, but I’m really into hiking and travelling. This year, I went to Hawaii for 10 days and all we did was drive across the island, hike and look at paradise in front of us.
The Plan
It’s far from being a well-designed plan so far as I’m just thinking of it while writing this post! I’m thinking of doing this in maybe 2 years. This would give me enough time to save more income and put it aside for my project.
I would use a 50K investment account to sustain this new lifestyle in addition to my website income. With 50K, I could generate additional dividend income (maybe $100-$150 per month) without touching my capital. I hope to avoid touching my RRSP account as any withdrawal would be taxable. Starting next year, I might consider investing 5K/year in my TFSA instead of my traditional RRSP contribution. This would help me to fund the 50K I will need.
If I could setup my RV with 50K, there will be another 50K to invest. This would be the best case scenario; I would have 100K invested in dividend stocks on top of my retirement account. The more I write about this project, the more I get excited.
I know my kids can do school at home with my wife and I. They would benefit from an amazing experience to learn history and geography on the ground; they will speak 3 languages (we already speak French) and they will learn to adapt to anything in life.
What do you think of this first draft?
Do you think I’m crazy or do you think it’s something that is feasible? I’m really looking forward your thoughts on this!
Hi Mike,
I could play the game and tell you “Go for it, What have you to lose?” But I won’t. 🙂 To me, you would need much more cash to go ahead with this plan. Also, I knew someone who tried a version of this plan, and after a year or so, came back to “a regular life”. Moving to another country was very difficult, especially on the kids, and they were all very happy to come back home. Kids need routines and a secure social life. Well, anyway, if you go ahead, try it on a very short term basis, and make sure you can come back to your “normal life” without too many hardships.
Mike. Not at all crazy but a few additional things to consider:
1. Taxation status for RRSP and TFSA in Costa Rica?
2. Health & Dental Care for family?
3. Education savings.
4. Children’s friends, lifestyle, routines
5. Plan B?
Isn’t this what Derek Foster did? Living in an RV and traveled around? If I were you I’d totally do it, it’d give you a chance to travel, hike, and see different parts of the world. How would the kids take it though? They’d be leaving their friends and hop between cities.
what does your wife think of your plan? if you are both of a mind to do this, why not try it for a month during summer vacation and see if you still think it is a good idea. take a leave of absence form work. rent a rv. strike out while you are a young person. home school the kids so everyone sees what that is like. in short, trial your vision and see if if it is really what you want
Hey Michel,
thx for your honest comment. I’m well aware that this will be a huge shock for our family. After discussing this plan for the past month, we plan on starting with Canada, then US, then Central America. It should leave us enough time to adapt! Worst comes to worst, we will come back to a normal life 😉
Hello Dan,
I will keep my Canadian citizenship and an address here as well so no taxation issues here (but will get taxed as a Canadian if I withdraw from my RRSP).
I will need healthcare insurance for sure! As for education savings, I’m afraid it will take a pause… but the kids will benefit from an all new environment to learn a lot more than they do at school… IMO.
Plan B is coming back home and buying a new house and restart my current life…
Tawcan,
my kids are still young, it won’t be that bad. And, when you think about it, their current friends won’t probably stand in 5 years from now. I’ll do it before my oldest hit high school, the shock should be smaller this way.
Hello Gary,
The idea came from both of us so this is not a problem 🙂 I don’t think I’ll rent an RV as it will look more like vacation than the real deal. I’ll go all-in, as I always do 😉
It’s not crazy but it may have some drawbacks. It may be more difficult to rejoin the workforce at a later date, should you wish to. Then again some employers may see it as an asset. If the RV needs major repairs could be a drain on the budget. May miss extended family. Could you survive if the markets were to repeat the 2008/9 decline? If you wish to get back into the housing market in ten years time you could be either sitting pretty if it declines or priced out if it keeps up with history. As children get older they get more challenging – much will depend on how much they enjoy the lifestyle. You will get to enjoy them, watch them grow, and make memories to last a life time. Lastly, worst case if you and your spouse grow tired of living 24/7 with each other it could lead to problems. Conversely you may build unbreakable bonds. Good luck which ever way you go.
Very thought provoking post. The ‘standard’ American lifestyle isn’t necessarily the best. This is definitely thinking outside the box house.
You DOn’t have enough money to pull it off.
Check out how much it costs to operate an RV of the size you would need for a family of five. You just might be surprised. Plus maintenance.
A lofty ambition but a lot of things to think about there.
Surprises me that you have not maxed out your TFSA’s in the past years. It would have been much better for you if you try to pull this off.
Are you serious? Your idea is not crazy but you will likely need a lot more money than you currently have. This must be a recent idea or you would have been maximizing your RRSP & TFSA contributions. Their balances are quite low.
Hey Steve,
There are definitely potential drawbacks. On my side, I only have my mother and while we get along pretty well, we don’t see each other that much.
I don’t expect to live off my investment, I know 50K is far from being enough. But my website income (especially Dividend Stocks Rock) could be enough so I don’t have to work again.
Worst comes to worst, I won’t have any problem joining the workforce again considering my background and diplomas.
Still, there are lots to think about it!
Ricardo, I’ve focused on maximizing my RRSP instead. Once RRSP and RESP contribution were made, I didn’t have room for TFSA. 3 kids is darn expensive, lol!
Bernie, I know, I will focus on making more money from my website to sustain my lifestyle. My investment bucket is definitely not big enough!
Not a bad idea. Why selling your house? Mortgage rate are very low and I’m probably sure that you can get some cash from your a house credit margin then rent your house. Renting a house in a good market can return you a little bit more than the capital -+ you gain in capital.
I will personally replace the VR by a trailer, more flexibility.
Finally, start to get a buzz on your project, contact the A major newspaper and sell the idea of writing in their newspaper to talk about the life of a Toronto Golden Boy leaving everything for adventure.
Don’t really think you have enough money nor income for this adventure to last very long. To consider this sabbatical, you and your wife have to be totally in sync because there will be days when the RV is too small and your great idea will not seem brilliant. You are likely underestimating the value of your current life (family, friends)and career. You have been working very hard setting up your new website and likely need some R&R. Sounds like a “mid-life” crisis so my advice is to tread carefully,try to avoid big mistakes and try to spend time in your current life on the things that are important to you.
Hey Hemgi,
I like the idea of contacting a newspaper,this could really be interesting, thx!!!
I’ll sell the house – I don’t want to deal with maintenance and tenants 😉
Hello CJL,
thx for your word of caution. This may be a mid-crisis life but I can get back this life at any moment. Getting a job when you are a hardworker in finance is not complicated where I live, therefore, it’s more like hitting the pause button for a while and see what’s on the other channels 🙂
Aside from the money points brought forward which you have thought of since you have income coming in from the online business.
The kids is where I would have concerned since yours would be 4, 9 and 11. Would they be out of school? Out of touch? Considering you would do this for a while, the kids would grow in that environment and it can be challenging.
Once you have kids, it’s not really about us anymore but there is a need to consider what is best for the kids. You may have to tell your friends that your deal to retire at 35 needs to be slightly delayed for the benefit of the kids unless your travel is just in the summer.
Firstly, let me say that I’m fan of your blog and greatly enjoy the information that you provide. I actually just crossed the $1000 per month in dividend income. With respect to your plan, in a perfect world that would be a great idea. You have the opportunity to increase the quality of time spent with your family. That being said, you have a young family and everything could change in a matter of minutes. Someone could get sick, a passion for an expensive hobby, accident. The list goes on. I think you need a bigger nest egg to handle the bumps. Take a few more years and do it right…
Hey Passive,
The thing is that I don’t think we are currently giving our kids the right set of values at school. Kids are overwhelmed by consumer goods and the fact they “need” this or that because all their friends have it.
I realized that last year when we went to Disney World. My kids really enjoyed this moment, they were really excited about it and I know they appreciated their trip. However, it is normal to go to Disney World; at least a dozen of their friends went already (age below 7!). This is just crazy.
Taking a pause from this lifestyle will make them (us!) appreciate what we have so easily in Canada. I know they will need a more stable environment later on, but I’m pretty sure I can reach both freedom and financial independence if I work on my websites for 12-18 months. The thing is that I can’t do it with my current lifestyle, I absolutely need my day job to be the bills here 😉
surprised no one mentioned this but it can be done, besides Derrick Foster. Mr Money Mustache and Financial Samarai as well Early Retirement Extreme all have great blogs
Hello Rob,
funny enough, I know Money Mustache, Sam and ERE but I didn’t know Derrick Foster! hahaha!
Follow your excitement! Do it.
You have put a lot of time and thought into this and so all you have to do now is just DO IT Mike.
When you come back, you will have to hustle hella hard again Mike, (working smarter right ? not harder 🙂 ) yeah I know…
Keep it up Mike, Life’s short not to enjoy here and there. You can always live the “Normal” life again when you get back… Cheers buddy.
Hey Tyler!
thx for your comment 🙂
To be honest, I’m reaching out to the point that it is now “probable” and not just “possible” that I don’t work in the financial industry when I come back ;-). I might just run my websites and continue this extraordinary life (I’m already looking at Australia! hahaha!)
Cheers,
Mike