2017-04-09

How much does it cost

Angie and I have been on the road for 1 year now. So, I thought this would be a good time to write about money.

One question we're constantly asked is "Are you interdependently wealthy?". Relatedly "Are you working", and "Where'd you get the money? So, first, here's the answers to those questions. No, no, I'm a programmer.

But, really that's not the most interesting question is it? Somehow most people fail to ask the really interesting question, the one they need to know if they want to do it to: how much does it cost?

I see a LOT of people saying "you can travel!" "It's cheaper than you think!" "You just have save a little"... etc. But no-one ever talks numbers. I think it's some sort of old propriety thing people have about talking about income and how much money you have. So, I'm going to break the rules of propriety in the interest of edification talk about real, solid, numbers. Here we go!

Numbers

Our budget is $24k a year, total for the two of us. From that I set $4k aside for surprises (like rolling our truck in a snow-storm in North Dakota), leaving $1600.00 a month, or $800 each per month. We just reached one year and we are *very* close to this budget (within a couple of thousand). That's something I'm actually pretty excited about.

So, where does that money go? Of the $1600:
  • $400 -> gasoline
  • $400 -> food
  • $400 -> Clothing and random incidentals for Brewer
  • $400 -> Clothing and random incidentals for Angie
It's not always *exactly* that breakdown, but it's usually in the ballpark. The $400 a month gives us a budget of "spending money" for replacing clothes and shoes, going to the movies, eating out, paying for drinks at coffee shops while we hang out in town (like I'm doing now), etc.

Part of the reason it stays in this range is that we almost never pay for camping. Very occasionally (like, twice in the last year), there's something really exciting and we realize it's *cheaper* to pay for camping nearby than for gas and wear on the truck. We eat out occasionally, especially if we want to try local cuisine... it would be a shame to pass through new-orleans and NOT get some local Cajun and Creole cooking, but we try and keep it to a minimum. Eating out adds up REALLY fast.

Note, that if I were traveling alone (if I hadn't met Angie), it would cost:
  • $400 -> gasoline
  • $200 -> food
  • $400 -> clothing and random incidentals
This comes to $1,000 a month, or $12,000 a year... plus a bit of padding, and you get ~$15k a year for one person to travel in the same we we're traveling.

I don't want to cheat, so there is a MAJOR expense I'm leaving out. If you followed the build of my truck, it cost me ~$21,000.00. That's basically a capitol expense, though it certainly does depreciate. Ideally though, if we didn't have any other emergencies, in 5 years we would've built up about enough money to replace the truck again. You could *definitely* do it cheaper. Pick up a truck in a little less mint condition, get a used, cap and you could get rolling for ~10k pretty easily. I think of ours as the luxury edition, with windoors and headroom and all that (it's all relative right?)

Harder to include is all the backpacking, rockclimbing, and camping equipment we have. It's actually less than a lot of families I see who go camping actually, but it's not trivial. If you are interested in this sort of lifestyle though, chances are you already own a lot of gear you'd need to sell, and would only need to buy (or make... this is smalladventures.net after all) a little bit.

How do you save that?

Make money, and live cheaply. If you haven't seen this blog let me give it a plug: http://www.mrmoneymustache.com. I won't advocate his every viewpoint by any means, but I found it very useful in realizing what I could do with what I already *had*.

I'm not saying everyone can do it. Not everyone has resources, but many do and don't realize it. For those of us with a good job, and no dependents, it's pretty doable. For a number of years I spent in the $10k-$15k range per year. My life wasn't austere, but of my interests I chose cheaper ones.

My coworkers mocked me a bit when I was making ~$200.0k (Yes, I recognize it was particularly easy for me) but shared a 3-bedroom apartment with 3 other people, and didn't own a car. They talked about what they called "Fuck you money" and "fuck off money" the first is financial freedom sufficient to quit a job without worrying about the time it'll take to get a new one. The second is financial freedom enough to not worry about every finding another job at all. They talked about the second as ~5 million and up... But it all depends on your lifestyle. If you want to live like Angie and me, it's not nearly so unattainable as that.

Model 1
Earn money, and then spend it.

If you make $30k a year (after taxes), you can still put away a year of travel per year of work... That's pretty good. It's amazing how much money people make that just falls in to a hole of cellphone bills, cars, junk electronics they replace every year, unnecessary AC, etc.

I've met a lot of people who do this, hitchhikers, thru-hikers, etc.


Model 2


Earn money and invest it, until you can retire permanently.

Now, I definitely don't trust where the economy is going... but lets talk about investment for a moment. There's an old rule, with a pretty solid derivation I won't go in to here, that you can take out 4% of your investments per year. That means that to have 15k a year, you need $375k invested.

At 15k a year that'll take a while... So model 1 is probably better if you really don't make much money, and want to travel now. But, on the other hand, imagine you make ~100k a year (after tax, again). If you can put away ~85k a year, you could retire in 5 years, with extra money to spare.

How much do I have?
It's a little bit complex with 401k's and everything else. There are a myriad of tricks for accessing that money (one of which I pulled today actually, I just moved some money in to a Roth IRA, which makes the principle available in 5 years, and keeps that money in a low tax bracket since I'm not working). But in total I have ~600k. This is actually where the 24k a year budget came from, based on the 4% rule.

IF I can access enough of the money in the 401k soon enough, and if the economy stays stable enough, Angie and I could theoretically travel like this indefinitely.

Most likely that won't happen though. We both expect that we'll want to settle down and buy land. If we buy a 200k property that'll reduce our principle, leaving only 400k invested, which would be too thin to travel with like this again... so I'll probably work more at some point to put some more away, we can be a little less close to the wire, and so we can leave more of the 401k money untouched for when we're old ('cause if you believe my generation will get social security I have a some oceanfront property in Arizona to sell you).

And remember... This is how Angie and I decided to travel for now. If you can do it cheaper, you can save even less, and get on the road even faster.

So, when someone says "are you independently wealthy?" I always wonder what they mean... I am in a sense, but probably not the way they think.

I've tried to keep this to facts.... This isn't about "everyone can do it" or anything... I just want to encourage people to look at what they have, and are making, realize where it's going, and what they could do with it if they wanted to.

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