A Dangerous Idea: Unemployed and Getting Richer
Roughly four years ago, I was introduced to an idea:
“While we’re travelling, and not working, we’re actually better off”
We’d just met some fellow motorhome travellers Chris and Tina at San Sebastian in northern Spain, and this simple statement was a bombshell to me. Ideas are dangerously powerful things. Once an idea has reached your ears, it’s very difficult to forget it, especially if it promises to give you something you very much crave.
In my case I craved freedom, and was on the look out for an idea which might help me achieve it. Freedom to experience life outside the office. Freedom from being forced to live with negativity. Freedom to think. Freedom to travel. Sheer, unadulterated, freedom. This idea promised all of it. This single sentence embedded a counter-intuitive idea in me: that it’s possible to not work, and still get richer.
You can be unemployed, living a dream life of freedom, and get richer while doing it.
I’m writing this post not to brag, as I suspect the universe would crap on me from a great height if I did, but out of a simple desire to pass this idea on, like it was passed to me.
Ju’s just completed our monthly budgets, and this month we got richer, having spent the whole month travelling and doing no work (I don’t count writing this blog as work, it’s not work to me, it’s interesting, voluntary and fun). Last month we also got richer. On the occasional month when we have a big expense, we get poorer, but after a month or two we start getting richer again. It seems surreal, but the cold-hearted spreadsheet does not lie.
We have more money coming in than we spend, but we do no work. How on Earth is this possible?
I didn’t know it, but the underlying foundation for the idea is a simple one, and a very old one: investing. When we first set off travelling in 2011, we sustained ourselves on savings, which gradually depleted, with the predictable result that they ran out and so did the freedom I’d come to love. We now live on money generated by assets we own, and while they continue to perform to a reasonable standard, we’ll continue to get richer. Of course, we also adopt a minimalist view to spending, and over the years have aggressively inspected our outgoings. With the angry swing of a sharpened scythe, we’ve removed anything which simply wasn’t giving us what we wanted in life, **poof**, unnecessary expenditure, gone.
To be honest, I’m being pretty conservative in the way I look at our accounts. I’m taking a fairly bleak view of things. If, for example, our trio of houses in the UK rises in value by 2% in a year we’d see our net worth increase by about an additional £8,000 that year. Of course, the housing market could equally fall, but as we don’t intend to sell in the short term, both of these scenarios are irrelevant to us. The main thing is we still have more money turning up each month, on average, than we spend.
This means we can live this way for as long as we live, if we choose to.
OK, that’s the idea, and if you’ve not already been exposed to it, and it serves to excite you, I’ve achieved something today. If you want to read up more, these are a few of the best books I devoured and found very helpful in building my own financial education and confidence this whole madcap life of ours could work. If I had to pick a single one, I’d go with Rich Dad Poor Dad, it really altered the way I perceived money.
I also found these blogs to be very helpful, since they were written by people who’d already achieved financial freedom through investing: mrmoneymustache.com, theescapeartist.me and earlyretirementextreme.com.
Cheers, Jay
Jay, just to let you know your ‘Mr Money’ link is misspelt, I think he uses ‘mustache’. Your link amusingly took me to an advert for incontinence pads.
Love the blog, looks like your enjoying Croatia.
Oops! Cheers for letting me know Matt, I have updated it. The sun must be getting to me!
Thanks for sharing. I’m about a year away from FIRE myself having made the decision to go for it in late 2007. I’m doing some of what you did and some differently. In brief:
– I’m working very hard to maximise earnings as you did.
– I’m living well below my means as you did and I’m planning on doing the same in early retirement.
– Where we differ is that I have no BTL investments. Property only makes up about 10% of my portfolio and it’s UK/EU commercial and industrial only via ETF’s. On top of that I have low cost UK/EU/US/Japan/Aus/Emerging Market equity trackers, UK index linked gilts, International corporate bonds and some gold.
– In FIRE I won’t have rents to live off. Instead I’m planning to live off dividends and not spend more than 2.5% of initial FIRE portfolio value that is then increased by up to inflation annually.
A different approach but the same goal achieved. Enjoy it and I’ll see you on the other side in less than 12 months.
Hi Retirement Investing Today! Not just us on this madcap swim against the tide then!
Our BTL leaning is due to the fact we achieved FI almost by accident, initially being accidental landlords. Having said that, around 40% of our overall net worth is in equities, and most of that’s sat in private pension plans. We have a relatively small amount invested in a variety of Vanguard ETFs, which we did to start getting ourselves used to direct stock market investing.
If I were starting from scratch, I’d be tempted to go with your ‘low hassle’ approach, although I do like our (again mostly accidental) asset class diversification. 2.5%, very conservative fella, but IMHO it’s whatever’s needed to enable you to sleep at night for a rather large number of years in FIRE.
Keep pushing on fella, greetings from a beach in Croatia, Jay
I’ve been following RIT now for a couple of years and it has been inspirational, along with a couple of books by Tim Hale and John Hutton. Like you I invest in trackers as I don’t have an ‘edge’ and let them get on with doing what they do. I fear it is too late for us now but we do have an OK pension pot (still building) – what holds us back is the the thought of not quite having enough!
Anyway enough of money stuff – update on ‘Hilma the Hymer’. She is awaiting all the paperwork from DVLA and a new set of boots. She has had full service, MOT, cambelt change with a full clean inside and fire extinguishers / blanket & CO2 alarm strewn all over her interior (plenty of TLC but nowhere to go at the moment) :-( We spend the odd day cleaning and preening her with a flask of cofee and sarnies. All should be good to go within next 7-10 days providing paperwork comes through OK. Planning our first trip ever in a Motorhome is exciting – we can only begin to wonder how the heck you mangage it full-time!! As ever a joy to keep reading the adventures you are having.
Hi guys,
We’ve been reading bits and pieces on your site for about a month now. I found you when I was researching motorhomes while we were on a six week trip. We’d already been planning on moving towards a 6mths travelling/ 6mths home lifestyle. No assets for us so we’ll have to come back to earn money once in a while. The motorhome idea was a new one though (well newish. We’d thought about it, but were concerned about carbon footprint and costs) and I was doing a bit of a feasability study. Our plan also involves a long term arts project and website/blog.
Anyway just to say many thanks for your site. It’s been absolutely invaluable to us. Good, clear information that has to my delight shown that the rough estimates and ideas I’d been drawing up look pretty spot on, and we’re now back home and working a plan to being away on our first proper tour by the end of the year. We’ve also fallen in love with the Hymer B544s! Went to look round one last week after seeing quite a few others, and it’s definitely the one for us. Hope we can find as good a bargain as you guys.
Happy travelling. x
Hi Fiona. Gotta love those Hymer B544s! And a 6 month on, 6 month off lifestyle sounds pretty cracking too (I’m preferring the 12 months off, but I’m lazy). The carbon footprint calculation sounds fascinating. I have pondered this one a time or two, and my gut feeling is he van option (if you’re not keeping a house and car too) would be far lower impact. I’ve never even attempted an actual calculation though – if you guys have anything you could share, it would be fascinating. Cheers! Jay
Great post Jay, finding your site a while back and reading almost daily has been inspirational and will enable us a life changing experience very soon. My finance freedom will come from a very good and safe company pension, investments from the lump sum (we have no debt and been mortgage free for some time) and renting out our property. Having used your cost of living calculations and assessing what we won’t need to spend on when out on the road means we’ll have more disposable income than I do currently working and will be retired 6 years earlier than I expected. If only I’d worked out a simpler life earlier! Thank you both so very much, I would not have been able to do any of that without having found your site.
Thanks very much for writing that Dave. I worry about posts like that, as I don’t want to freak folks out, or come across as a gloating git. Without someone sharing the idea of a radical different way of thinking, we’re likely to have worked a decade longer. Echo that sentiment: if only we’d worked out the simpler life earlier, but at 43 we can hardly moan! Cheers, and congratulations, Jay
We are of the same opinion as Dave – if we hadn’t found your site and started looking differently about how money can work for us rather than us working for it we wouldn’t be about to set off on our adventure in 2 days. We’d still have done the usual working until retirement age thing. Drastically cutting down our living expenses and being frugal and learning about investing has given us the freedom we have always craved. So a massive thanks from us too!