Let Other People Pay for Your Retirement

[Kenomac]

Originally Posted by reed1v

Ugh. Friends that rented out their home lost big money when they came back. Another friend that allowed a "caretaker" to live aboard while they were gone to Japan came back to a complete wreck(in truth a wreck).

We went sailing for the summer three years ago, and came back to squatters living in the carriage house office. It cost me $14,000 to get those drug addict ******** out, plus the housing court forced us to live ten feet from the vermin for two months.

That doesn't mean you give up. Eventually the squatters were gone (after my lawyer advised me to bribe the shits with $1800 cash so they could buy some heroin)... and we moved on. It doesn't do any good to dwell on the past or carry the anger. It's business.

[akprb]

Kenomac: I'm not too surprised at the variety of responses you have received. We are in our 25th year of landlording (horrible word but sums it up). Started with NOTHING, hard work for ten years but still sailed 3 months on, 3 months off (shared boat with another landlord, we were in our 30's).

Early 2000 sold half our inventory and set out for 10 years off. Returned to the States in 2012 and back at it. I've written about this experience a lot, what I really wanted to think about was the question you asked, or perhaps better said the proposition.

I'm in full agreement that residential and commercial rentals are a no brainer way to go to experience financial and time freedom. No question about it. What I found over a quarter century however is very few are "built" for it. Like any business it is tough and capital intensive. It took us several years to build the management model that allowed for me to be gone for extended periods of time (and I mean 6 months then back to buildings for 14 days). There were a lot of lessons.

Recently I came across "The Four Hour Workweek" by Tim Ferris. So many of his ideas we did. That would be the book I'd recommend to most who desire the freedom from the day to day and offers a lot more ideas than just real estate. Again though it takes a certain nut to cast the lines of security and step out into the ocean of entrepreneurship. I have a feeling many who have read this far have that passion and the dream and desire to make it happen for themselves and their families.

Cruising is simply a symptom of our thoughts :-)

[SV THIRD DAY]

Originally Posted by Kenomac

That doesn't mean you give up. Eventually the squatters were gone (after my lawyer advised me to bribe the shits with $1800 cash so they could buy some heroin)... and we moved on. It doesn't do any good to dwell on the past or carry the anger. It's business.

Ah...but most people can't seperate Business from personal...so they would literally worry themselves sick. My wife is like that, so when the renters stopped paying rent while we were cruising in Mexico, I told her to relax, while I rented a car and drove the 1000 miles up Baja to knock on their door and say..."hey...the rents late". If your stomach won't let you deal with deadbeats, then being a landlord is not for you. But for us...the renters paid our monthly expenses while we cruised and if it wasn't for the kids wanting to do "real high school" vs home school, I would still be in Mexico letting the renters pay for our Tacos.

A Great point that Kenomac is making I want to second.
GO Now...GO Simple..So Small...before you get sick and die.
The Biggest mistake I see people making is the myth that their boat has to be perfect and suitable for the cover photo for Ocean Navigator or Cruising World magazine before they are "ready" to leave. BS...

The best way to plan to cruise is to STOP PLANNING and go cruising.

[bjymd]

For any one interested, there is a book called Rich Dad, Poor Dad which deals with the intricacies of accumulating wealth thru investing in residential property.
It works pretty well as long as you don't buy at the peak of a property market bubble.

[dgz3]

Kenomac's plan is certainly doable and could work very well. But there are horror stories aplenty in the rental property business. I've had some. Like the lady who moved out but left her 40 lb dog behind for 5 days?
And it IS a business that you, or somebody, has to actively manage. A good local property manager is key if you are going to be an absentee owner. Background checks, screening, collections, deposits, record keeping, maintenance, etc. would be done for you. And paid for out of the income. Your job then becomes managing the manager. Many realtors offer and specialize in this service.
Also, you need more than one, or even two properties. Unless you are Ok with your income going to zero without warning when your tenant quits paying without notice. And you need enough of a cushion on deposit for the manager to handle repairs and re renting expenses.
But yeah, if someone who chooses to spend their money acquiring rental properties instead of on new cars, boat payments, and ritzy personal residences, could certainly put together a rental property business that they could live off of easily on a boat. Or anywhere else.

[Tessellate]

Totally agree with this (not the thread title but rather the time-on/time-off idea which seemed to me the main point of Kenomac's post). We're doing 3 months off this summer (so 9 months work / 3 months cruising). We've talked to some cruisers who basically just assume they can't do this, and so they've never tried. One couple was dual income in a super high paying field ($300k average in Seattle). The idea that they don't think they can take extended time off is laughable. Yet 98% of people do think that way.

All it took for us to get 3 months unpaid leave was to ask. So why don't more people do it? I think because once you have a money spigot delivering reliable income it's hard to turn it off. It's not even about the money, it's just people like being comfortable and most don't like change. Perhaps it's loss aversion.

Our 3 months off starts in 4 weeks and the prep has been a lot of work and a lot of change. I've been working 14-16 hour days - 8 hours at my paying job, 6-8 hours at my unpaid jobs (packing up the condo, renting it out, and finishing boat projects).

But yes, mini retirements are a very good strategy I think. There are several books / blogs you can read on this. Real estate and marina moorage in Seattle is very expensive, so in our months cruising the condo rent will actually fully pay for our cruising expenses. That's not to say it fully pays for our boat expenses - a good reason to work those other 9 months is we could pay for the more expensive boat projects through income then.

I'm not sure this is doable every year though. Most employers won't necessarily allow us to take 3 months off every year. And it would certainly slow down promotion opportunities. The ideal obviously would be a job where you are self employed / self contracted flexibly enough to only work part of the year, *and* you're living cheaply enough to only spend about 70-80% of that income (because you still need to be saving for retirement).

[dgrenwich]

I've been doing something similar to Kenomac's plan for 6 years now (I'm 46). Initially I took off cruising for 2 years straight and then started returning to Canada to work for 6 months and cruise for 6. I've rented my property out full time in that period, renting a room from friends while back home to save money and make things simple—keeping good stable long term tenants in the process. My tenants have all been very responsible good people. In Canada I drive an old reliable car, live fairly cheaply and save cash.

The benefits are:

• Cash flow without worrying about retirement. I put some money away for retirement still but also feel that, at the pace I'm going, I would enjoy working for much longer. It is, after all, semi-retirement already.

• You say goodbye to friends and countries you love all the time. You say hello to them too. It is a great way to appreciate everywhere you are. I miss Canada when I'm in the Caribbean and vice versa but also appreciate it immensely.

• I'm cruising at a relatively young age. My first foray was at 36 years of age but cash was a huge problem then. It still is, but not nearly as much now. I hope I'm as robust and healthy at 76 as I am at 46, but I'm not going to gamble on it. The time to go is now.

•My income is lower, but as pointed out, the lowering of income reduces the tax payable (as a percentage as I'm in a lower tax bracket) making the income actually made that much more efficient. Work is not just something you do until retirement but rather a purpose-filled yet temporary condition.

The disadvantages are

• I simply don't garner as much money as I would working/running my business full time. For example, to keep steady work coming in from clients who operate year round (all of them), I subcontract to some of my colleagues at a discounted rate. It is simply the price to pay for freedom.

• Having your wife/girlfriend/partner sign on to the lifestyle is not a given. I've met many a happy cruising couple but also many lonely old dudes. This goes for cruising in general of course, but flying back for 6 months (or whatever your time period) is not for everyone.

All accounted for I feel very lucky to get to do this, to live this life. Anyone who is contemplating it should simply do it. There is quite literally, over the course of time, an infinite amount of money to be made, but only a finite amount of time to do the things you want to do.

[astokel]

I'm a person who cares about our society and how everyone, not just me live. The OP should not be proud and boastful. You do what you feel you must do but don't brag about it. It doesn't look good on you.

[skipmac]

Originally Posted by astokel

I'm a person who cares about our society and how everyone, not just me live. The OP should not be proud and boastful. You do what you feel you must do but don't brag about it. It doesn't look good on you.

What is it about the OP that doesn't look good?

Do you see something inherently bad or wrong in renting houses to others that cannot afford to or don't choose to buy a home?

How else would those people who cannot afford to buy a house find a place to live if not renting from someone that bought the property to rent? Should people buy a house and then let someone else live there rent free?

I assure you that Ken isn't a slum lord renting rat and roach infested hovels to impoverished families that have no other place to go.

[thomm225]

Originally Posted by skipmac

What is it about the OP that doesn't look good?

He said what it was .... and did so in a very nice way

[skipmac]

Originally Posted by thomm225

He said what it was .... and did so in a very nice way

Maybe I'm just dense. Is he saying the OP doesn't care about society and how other people live? Is he calling the OP proud and boastful? If that's what you mean then it doesn't sound all that nice to me.

If I recall, the OP is a nurse by profession. Most nurses I've encountered cared quite a bit about people and society.

And I'll repeat the questions. What is wrong, uncaring, immoral or in any way bad or negative with buying property to rent it out? If someone didn't buy houses and apartments to rent out then where would all these people live that can't afford to but a house? Are you suggesting that anyone unable to afford the down payment to buy a house should be given free rent? Who should pay for this?

[thomm225]

Originally Posted by skipmac

Maybe I'm just dense. Is he saying the OP doesn't care about society and how other people live? Is he calling the OP proud and boastful? If that's what you mean then it doesn't sound all that nice to me.

If I recall, the OP is a nurse by profession. Most nurses I've encountered cared quite a bit about people and society.

Mr K. bitches about his job from time to time.

He and Sailorboy1.

They were "boasting" earlier about how they said "Or What" when someone said something they needed to do before they quit or left for a Leave of Absence

Most of us say that sort of thing in our teens or early 20's. Not usually in our later years, but I do see it from time to time when someone finally gets to tell the boss or coworkers exactly what they thought as they exit

You are right though about most nurses.

Most nurses are great but some seem to be in it for the money only

[MarkJ]

Geeeze, leave off people. Why get personal?

And some posters trying to make real estate a 'business' instead of an investment.

To those people too lazy to work to buy and expensive boat, and too spend-thrift to save bleating some left wing view to hurt those that work and save is ridiculous.

Let me tell you: cruising costs ****-loads. Its big DOLLARS. And there's only one way to cast the yoke off and head to sea... and that ain't running away, its careful investing and planning for ones whole life.

If you are 50 and haven't started saving yet I have news for you: too bloody late.





Sent from a stupid phone that replaces words with weird stuff.

[daletournier]

Originally Posted by bjymd

For any one interested, there is a book called Rich Dad, Poor Dad which deals with the intricacies of accumulating wealth thru investing in residential property.
It works pretty well as long as you don't buy at the peak of a property market bubble.

This simple book 15 years ago changed my life. It taught me the difference between an asset and a liability. People see their house as a asset, if its not putting money in your pocket every week then it's a liability. I have debt but other people pay it for me. With the mental shift that I had after reading this book I was able to stop work at 38.
Not everyone can grasp the idea. I have a young manager, he wanted to buy a house as he was a good saver. I explained to him the difference between good debt and bad debt, he got it instantly. He purchased a house with a very large 55m2 garage, he spent 50k converting the garage to a very funky apartment that he lives in, he rents the 4 rooms in his house out for $170/ week each!. After the mortgage is payed each week hes approx $300 in profit and lives rent free!'BTW hes 22 and comes from nothing. I've spoken to many , just like I spoke to Guy, not one person other than him as taken any action.
It comes down to how you view your world, I would like a larger boat and can afford it, I currently cruise on a 33ft freedom BUT I see financial change coming so choose to use my money to sure up my financial world. It's all about choices and taking action, the road less travelled.
Cheers Dale.

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[daletournier]

Originally Posted by astokel

I'm a person who cares about our society and how everyone, not just me live. The OP should not be proud and boastful. You do what you feel you must do but don't brag about it. It doesn't look good on you.

I didn't hear him bragging or being boastful, it's inspiring, try framing it differently.

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