Not everyone can save more to have Billy Ray’s financial flexibility but the sooner one can be self-aware of the possibility that they might want to make a change the better their chance for doing what needs to be done to get there.
Without knowing any of Billy Ray’s particulars, let’s say he needs his portfolio to generate $3000/month in today’s dollars (assuming the 4% rule) when he is 65 and his portfolio can generate that $3000 now in today’s dollars then he probably doesn’t need save so aggressively going forward which creates the flexibility to do this new, lower paying gig.
Of course living below ones means increases the odds that a scenario like Billy Ray’s can succeed. This is simple math, a $3000 lifestyle on a $10,000 income increases the chances for success. This is one reason why I am so intrigued with the Tiny House ‘Movement’ (although I think movement is a terrible word to describe it). As a reminder, this is about living in a very small ‘house’ that is very inexpensive.
Again, not right for too many people but can be the solution for some. This link is about a married couple who sought out tiny living when they lost their house and business during the financial crisis. They’re trying to sell you something (a five day seminar on tiny living) but that isn’t so bad in that if you read the article it is clear (to me anyway) that they really enjoy every aspect of the concept and now are trying to figure out how to monetize their enjoyment. Not everything can be monetized so who knows whether they can succeed with that part of their experience but it is a logical tie in to what we’ve been discussing here over the years.
This article was written by AdvisorShares ETF Strategist Roger Nusbaum.