Wednesday, July 23, 2014
Can't Have the House and the Money
After visiting my property last week, I've been going in mental circles again. I suppose it is good to review my options just in case I don't come to the same conclusions. It's the middle of a scorching summer. I can't do much except think. I can't expect to go out to my property with all of the work that needs to be done and not want to run away screaming. I reviewed my budget spreadsheet and tried to whittle away at it so that I can stay in this house where all of the infrastructure already exists. The only problem is that my retirement money is in this house. There is no way for me to keep living in the house and get the money at the same time. I considered a roommate (not going to happen), living in a tiny house in the backyard and renting out the house (yard isn't big enough), buying another house (no more rentals!), but it just won't work. I need to just stick with my plan and not worry about the mess out at my property because my focus right now is paying off my mortgage, not improving my property. It's just so hard to wait. It doesn't help that it is 80F in my house because I only have a evaporative cooler. It makes me cranky and impatient and I start to think about buying air conditioning but I would need around $6,000 and in a few weeks I won't need A/C so I need to just not think about it. And no more recreational shopping (dumpster diving is ok). The only thing I should be ordering are free seeds through the seed library, which I did and they should be at the library tomorrow for pickup. I love the seed library! I get to pretend I am buying seeds and then grow some food. So, I will try to be patient and stick to the plan and not think about all the work that needs to be done because it isn't time for that yet.
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Hello. I live in Yuma...well...Somerton, actually, if you know where that is...I really like Tucson but too far away from my family in San Diego...from where I live it's like three hours...doable but not too often!
In an earlier post you wonder if $500,000 will be enough to finance an early retirement...hmmm...how can I put this...no!
Right now guaranteed savings (capital guaranteed, that is) are paying less than one-half of one percent...that's less than inflation so those "guaranteed accounts are actually losing money!
That sucks. BUT! You will also have income from your two (what will be) rental properties, right? Or do you plan to sell those and those sales will be the source of the $500k?
If so, I would advise against it; rental income will beat the zero you will be earning on cash...
I achieved financial independence in 2007...walked away from a job paying $100k...took $$190k of savings and bought two rental properties. My gross rental income is $2430 a month...net about $2,000.
Are rental more work than money in the bank> Well, yea! But the pay is better!
Let the temperature drop a bit and you will know what to do.
I am not sure how much you need to live in out there but to me it all seems so cheap and pleasantly affordable but then i think about healthcare and suddenly its not at all. Tricky one
Hello tmg.book, thanks for stopping by. I lived in Yuma for 6 years. Boy, it was hot! But I learned how cotton is bailed and that it is a great place to grow lettuce in the winter, not that I had any luck. My rental house gives me about a 5% return after all fees, taxes, insurance, and maintenance. I might keep it. I'm not sure. Depends on the housing market when I reach that point. It definitely adds nice cash flow when it is not vacant or in need of repair which seems to happen every other year.
Lizzie, definitely the desert summer blues (like the winter blues but with oppressive heat). Just thinking about doing any work out at my property makes me want a nap. I'm not too worried about healthcare since I figure I will qualify for medicaid although I don't really know what medicaid pays for. I'm more worried about designing a life that depends on physical work and then becoming disabled. That would be terrible. My shed house is not wheelchair accessible and who would take care of my dogs?
Daizy, our health is the wild card in all of our planning for a certain lifestyle. Getting old is not for wimps!
As much as you seem to enjoy living alone, it is counter-indicated the older you get. Living with someone is important, and as much as you might like animals, they don't really count.
I have been financially independent since 2007 and without a "real job" ever since and what I can tell you is money is important but not as important as your health and ties that bind.
And if one is to get older and infirm, with the cost of long-term care almost no amount of money will be enough.
That does not mean, however, that you will be the one who will choose your end-of-life care situation. It sucks, that's all.
I envy those with a large loving family who know with some certainty that they will be cared for lovingly regardless of where their life might take them.
tmgbooks, I am watching my parents deal with growing old. My father has alzheimers and is in a care home. It costs $3k a month which is relatively cheap. My mother worries about having enough money for her own medical care. I will never be able to afford a nursing home for myself so, if I need it, I'll have to spend all of my money and go on medicaid. I can't say that having a large loving family helped much in my parents' situation since no one was in a position to give my father 24hr. care. I'm hoping for 20 years of semi-retirement before health problems slow me down. I can't worry about it too much since it is out of my control
So your mother, who helps finance your endeavours, has to spend 3k each month for strangers to look after your father, who has Alzheimer's, because his family is too busy living life and dealing with there own financial issues to be bothered to do it? Now she fears what will happen to her when she doesnt have the money to pay for her own care, while also helping her adult children financially. Yet you say when you get older you will dump your money and go on Medicare so the government/taxpayers will have to pay for your care? Saying "its out of my control" is just what cowards say to themselves feel like they aren't responsible for the consequences. It is in your control and every choice you make shapes the outcome. You have a very special mother who puts her adult childrens wants before her needs. I just hope someone does the same for her.
Anonymous, you missed what I said. I said I would have to spend my money, not dump, and go on Medicaid. By spend I mean spend on my care. And if my money runs out, Medicaid kicks in to pay for care if one's social security doesn't cover the whole cost. In the state of Arizona it is called ALTCS Arizona Long Term Care System. Medicare is a different thing. And what is beyond my control is whether I become incapacitated or not, either to dementia, accident or illness. At that point the decisions for my care will be made for me.
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