Dec 212015
 

Many people, should they extensively read this ‘blog (….I guess they won’t because I don’t advertise or share that it exists yet) will probably notice some level of indecision and conflict expressed in my thoughts over time.

One big theme of late is obviously the focus on the FIIRE plan. Allied to that is the whole financial thing → earning more, spending less, improving the size of the stash.

On the other side of the coin are some seemingly lavish and counter productive lifestyle choices → sailboat, Glencairn, travel costs etc.

To set the record straight, it’s not about FIRE as soon as possible at any cost. The sailing lifestyle is a hugely important part of who I am, of who I still wish to be. Same with Glencairn → it’s where we want to live !

There are many examples of extreme focus and success on the FIRE road, many of whom I regularly read and learn from. But they aren’t me! [One of my favorites that more sort of matches the kind of life I hope to live in my old age is Lloyd Kahn]

Putting the boat on hold this last 2 years has been a little extremely hard. I still have the thought that maybe it’s best to try and sell her rather than the cost of moving her down? But I won’t get R200k for her at present, not in the current economy with layoffs, stagnant wages and uncertainty. Maybe R140k, and I’m not sure I want to give her away at any price just to save the transport cost and hassle.

So what really drives the desire to stop working, especially when I admit that I’ll work again, but on my terms?

  • Time freedom – This is the big one. RE with FI means my time is all mine.
    • What about unpaid leave?
    • What about more working from home?
    • How far can I push the boundaries an still maintain my morals?
  • Location freedom
    • This is difficult in the South African engineering market. Difficult but not impossible!?
  • Income
    • Must build the stash to reach FI so that this doesn’t matter
    • Right now though it (the income) actually matters!
  • Making a difference
    • This doesn’t happen in the corporate
    • All for family but sometimes it seems they really don’t care until it’s taken away.

I could focus every cent and every moment in working and building the stash. Cruisers do this all the time. 6 to 12 months of slog in the salt mines for a few years of freedom on the ocean swell.

Isn’t that what I’m doing? No. The time frame for RE is too long to commit all of life over that period. Better to live a little more today and delay the FIRE date a further few years. Balance is king!

I could / should sell up the Isuzu [perhaps]. Why?

  • For selling:
    • Tyres cost R1400 a piece, minimum – more than double the Fiat’s fancy low profiles.
    • Even with the fuel card [me paying 40% of the pump price] – I have this gut feel that it’s a cost on par with the Fiat.
    • It’s costing me R3k pm, apart from annual maintenance costs. And then, by Aug 2017 when I have no more payment, I’ll still owe R54k on a vehicle with over 350000km on the clock. – as of 2015.12.05 I still have to pay R107169 on finance in total. So in theory I could finance another vehicle where the total finance cost equals R100k -》 not much of a vehicle that will be!
    • Lots of niggles and hiccups lately => a precursor to heavy repair bills or just par for the course wanting to own a car, any car?
    • It will scratch an itch [however temporarily]
  • Against Selling:
    • I can ill afford to spend another R100k plus on the bond right now [Fiat, B tuition, Caz tuition] – so I’d feel the need to finance another vehicle rather than pay out the bond. And I’ve sworn of any further finance deals, yet I’m borrowing to meet tuition requirements!?
    • without a 4×4 I won’t be able to do all that back-road exploring that I always do ! never do !! Could get a Jimny or could actually wait until FIRE and then reassess if this is really something I’ll actually do rather than just dream about.
    • I can’t put up that rooftop tent to sleep over on the road – like we’ll ever do that !! Same argument as above. Get when you need not 10 years before!!
    • I need want a bakkie for the DIY / Refurb plan – this is possibly one of the few reasons that actually make sense => then buy a smaller Bantam or Corsa!
    • I’ve always wasted by not sticking with a car [eg BMW, Jeep etc]. Maybe this is the good-old-car worth battling on for? i.e. I’m very good at selling an unused <whatever> but not very good at then living without the <Whatever> [bike, car, boat, hifi etc etc]
    • A smaller bakkie cannot safely transport more than 2 people. we still have the odd need to do so. Again, could probably make do with a sedan and a tow hitch to replace the bakkie.
    • I could stop using the Isuzu -> Problem is work as well as the fuel perk. While I do life this way it doesn’t make sense not to utilise it to the full.
    • What does the Isuzu actually cost me per year to maintain and run? It’s still far from the cost needed to purchase another vehicle [or is it?]. Experience has taught me you always loose 3 to 4x more when you try and get rid off your old cars. It’s just not worth it….financially or emotionally.

What of the corruption and rot within South Africa? I could chuck it all in and emigrate but, with the sorry state of my small bucket of Rands, I’d pretty much be guaranteed of having to start from the bottom and work for the rest of my life. That may not be something I’m ready to do, no matter how bad things get here. However, I guess there’s a line somewhere – Zimbabwe, Syria, who knows? Trouble is, once that line is crossed it’s too late and has left behind zero [or very little] financial reserves. Is it worth have a part of the diversification plan target this “fear”?

Obviously, while many of these (and other) thoughts are buzzing my brain, they are brought to the fore when reading about a FIRE-individual selling off his car to save the costs. Makes you rethink and replan. One has to be careful though – this could also just be another form of keeping up with the Joneses, albeit a better FIRE-Jones than the average Consumer-Jones. While there are many similarities, no-one has our exact life, no-one has our exact challenges and no-one has our exact preferences. While some hats may fit better than others, none of them are a perfect, custom fit.

So, if I decide to keep the Isuzu or not, it’s a decision I need to make based on my particular life. Sure, I can take on board what others have done and why [that’s why I like ‘Blogs that actually reveal the detail, warts and all – because all those glossy “facebook-style” life-is-always-good blurbs are actually useless! ]

At this stage, I don’t know. My gut tells me sell but I also know I have a very poor track record wrt cars so on the other hand it may be best to stick it out – at least until it’s paid and I can re-evaluate knowing actual costs for UCT by that stage.

Pay down bond or invest?

  • I’m sure I’ve read and logged this article before but it’s time for a reread – http://financialmentor.com/financial-advice/pay-off-mortgage-early-or-invest/7478
  • Bottom line … theres no right or wrong. For us its a balancing act between having no debt and between financing additional rentals. A balancing act to fund kids educations and cars, not because we must but because we choose to. For me its a sliding scale. R1M is too much so more must go to killing debt rather than investing. As it comes down the relative amounts should change.

We do however need to very carefully consider additional borrowing for a Glencairn garage or an Ocean Blue relocation. A very careful consideration indeed for this is evil consumer lifestyle debt!

Why would I even be having this thought?

  • Lots of recent debt spending on consumer items [cars boat and education]
  • The belief I need to diversify FIRE income streams -> thus more rental income.
  • The need to fast-track FIRE as best possible.
  • Also remember….we wouldn’t be sitting up at R1M without the detour down the Z3 road ….. !

So, back to the Isuzu Sell/Keep debate – I think it’s a keep for now because:

  • The debt level at over R1M [and more UCT to come] is unbearably high. The next 2 years are almost certain to see it rise to around R1.3M or even R1.4M.
  • So another car would entail another hire purchase deal – which I promised myself I never want to do again.
  • So may as well stick out the current one at least until 2017 and the decision to fund R54k residual or terminate. [Yet another reminder that a moment’s weakness will haunt you for many years down the line still]
  • We also need to work at reducing the bond because the overdraft facility is our buffer, our 3-6 month cash stash in case the worst happens. Right now that stash is sufficient but wit UCT fees looming it’s going to dwindle fast.

No more major changes or financial hiccups!! UCT first and then let’s see.

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