Last year one of my most popular blog series was a “How to Retire On…” $100,000, $50,000, $25,000 and $10,000. This was an exercise of imagination and logistics based on how I would retire if I had a minimal dollar to work with. I included ideas on how I would minimize and maximize my lifestyle to pull off a successful early retirement. Now I am going to look at retirement on $250,000.
Here were the rules that I used last year, and they will still apply.
-For me retirement is all about enjoying traveling. So, I won’t leave that out of my plans, even with limited funds. I will walk you through my mindset on how I would travel, be free, and make some supplemental money along the way.
-Besides the money, the only thing I have in this scenario is my 2001 Lexus Lx470 which has 283,000 miles on it.
(Now that same vehicle has almost 303,000 miles on it.)
-I have sold all my possessions for $1 and I’m starting out with an empty slate.
-My skillset is that of a financial advisor. I have some computer skills and of course I have written a book. I have very basic electrician and plumbing skills. I have zero construction and carpentry experience. I’ll have to stay within my skillset which is understanding the game of money.
This is just a fun exercise on how I would do it. Your way might be very different. With two teenagers still at home, (One is off to college now) I still have two years (One year) before I can take off and roam around. Plus, I have my long-time girlfriend, Deb, who I could never leave behind, and she’d be with me.
How would I structure my retirement if I had $250,000 to my name?
I’ve often mentioned in blogs and videos that a small cabin in the woods is very appealing to me. I’ve researched several possible landing spots from Montana (too cold) to the West Coast. Northern Arizona, around the Flagstaff area, continues to be a pull for me so let’s start of there.
I would look for a home in the $175,000 range in the high desert, which is around 5200 ft above sea level. For example, I found an off-grid home in Seligman which is listed on Zillow for $199,000. It’s been on Zillow for almost 900 days and it’s in the middle of nowhere. I feel like I could get it for $175,000. Peace and solitude are important for me but so is internet. It’s possible that this off grid home has little or no internet access, so I might need to look into satellite internet. However, this home is around 19 miles to Seligman, so I could also simply go into town a few times a week.
Cost of living
Because this is an off-grid cabin with solar, the electric bill would be non-existent. However, there would be propane costs for heating. Would I need air conditioning at 5200 ft above sea level? Well, it is Arizona, and I’m sure it would get rather warm so a couple of efficient window units might do the trick. Estimated property tax on the house and 40 acres would be around $109 a month as well as $70 for home insurance. Otherwise you’re looking at expenses for food and miscellaneous items.
I’ve reduced my social security due to not paying much into it from age 49 to age 62. My pension got cut in half due to a divorce. So for the next 12 years, I need to generate a supplemental income stream to get me to age 62.
How would I make any money living here in the middle of absolute nowhere? With internet access being possibly spotty, I’d look at writing eBooks. eBooks are a great way to make money through Amazon and they don’t have to be 150 pages long. Matter of fact, many eBooks are under 50 pages long. I’m confident I could write two to three eBooks a month which over the course of a year, starts to add up. The magic isn’t writing one eBook but it’s when you keeping plugging away and next thing you know you have 50+ books and the residuals really start adding up.
My Monthly Budget:
$179 Taxes and Insurance
$50 Cell Phone
$100 Transportation (Weekly trips to town)
$250 Miscellaneous (Home Improvements/Car repairs)
How far will my $250,000 go?
Let’s say I could get the home for $175,000 – then I’d have around $75,000 left. With my expenses being roughly $900 a month or $10,800 a year, I’d need to start making some money fairly quickly. With writing eBooks and uploading them to Amazon, it may take at least one year to get to a break even point on my expenses. After the first year, I feel confident that I could start covering my expenses with income.
Granted, this isn’t my little cabin in the woods. More like “it’s my little cabin in the high desert in the middle of BFE”. However, it appears to be a peaceful location with plenty of land. I could see myself sitting on the porch each evening with a cold beer and a nice cigar watching the tumbleweeds.
It’s not for everyone but I must say that I’m tired of all the noise. Take me back to the Little House on the Prairie days and I’d be just fine.
Where would you settle if you could design your life?
Live Free My Friends,