I was going through my budget, coming up with averages of what I spend, you know.. base expenses, just above living on beans and rice, and cared for, but not comfortable.
I realized that I could retire today if I wanted to.
This is my half of the budget only.
Regarding my partner paying half: for instance, housing up there says $394, this means that my partner pays $394 as well, for a total of $788. This is truly what I only pay out of MY money. We separate everything and I want to keep it that way so it stays fair for us, there is no resentment and stress.
$1633.53 for the base expenses, is very low. I would actually round it up to to $2000 to make it a true “base expenses” budget.
Things happen – we spend a little big more or less on certain things, and things fluctuate, so I think $2000 is a solid budget, which is about $24,000 a year for my half ($48,000 total for the household, but as I only pay half…)
BACK TO THE INCOME NUMBERS…
So this blog pulls in about $1000/month in income. It has slowly been climbing (last month was $1300), but I want to keep it conservative because I don’t like to overestimate on things I cannot control.
$1000 a month in income, means I only need to cover another $1000 in expenses elsewhere.
My dividends on average, pay out $614 a month. I don’t take it as an income, and reinvest it under a DRIP (dividend reinvestment plan), so I don’t see that income, but I know it is there, as I have been tracking it diligently.
That leaves about $386 left to cover. That, is actually easily covered by my $200K emergency fund.
Yes, I have $200,000 as an emergency fund, when I am in between contracts. The interest rate on that is 2.3% – 2.74%, and it basically covers my housing costs.
Let’s say I drop it in savings for 2.3% only, this means I get about $383.33 a month JUST in interest alone, and assuming I don’t draw down on that amount.
(Currently, it is earning 2.74% but, really, we are only about $2.70 off from my average $2000 budget scenario).
Of course, I am also doing other things on the side in addition, like getting about $417 in free cash last month from signing up (and subsequently, closing within 3 weeks) a new chequing account, and taking out a $25,000 line of credit at 0% interest to make some money on it by throwing it into a high interest savings account.
I COULD LITERALLY RETIRE TODAY
Isn’t that scary? I could stop my career today.
Maybe not “retire” in that sense of the word, but “retire from my current day job and do something else”. Right? Just like everyone else.
Who knew I’d say that?
BUT I WON’T…
Well we all know I can’t survive on $2000 a month.
WHO ARE WE KIDDING HERE?
Let’s not pretend I can live on that budget. I can do it for a short period of time, but .. I’m unable to keep it up for 60 years.
There are no vacations, no actual shopping or fun things to do in said $2000 budget. I will actually feel COMFORTABLE at a $3500/month budget to cover all these things.
$3500/month is not unreasonable.
I could take a minimum wage job, and basically live off that and my savings….
…but why would I? I still love my job and make good money.
Right now, a good solid chunk of my net worth is in my home and my car.
The rest of it, if you look at it, is not that much, about $430,000. For me, it isn’t enough to pay for the next 60 years (possibly) of my life in actual retirement.
I would really feel more comfortable if I had a few million banked in investments/cash.
I think I would like to save another $1.5 million before I entertain ‘retirement’.
I’d also be bored. There’s that. What would I do?
Have to figure this out before I stop working. I think for now, I like my life exactly the way it is. Work a bit, chill a bit. Work a bit, chill a bit.