Living the Triestine Dream: Let's quit work forever!!

This week I am obsessed with finances. Every once in a while I get this bug. I love reading the frugal blogs and trying to figure out how I can live free and clear without working (of course I will work anyway because I love working, but I just don't want all the PRESSURE to have to pay bills and things. I want them to pay themselves.)

Every time I bring this up, my husband has the same Italian reaction: "Retire early? That's not possible. We don't make enough money. We don't know anyone who has ever done that! Maybe in America, but no, sirree, not here in Italy! Not Possible!" End of Story.

But my Uncle?

Well, your Uncle made a lot more money than we do. He's rich. Maybe if we were rich... but we are not.

Well, how much do we have to have to be rich?!

Um. I don't know. A million?

And that's how these conversations go. Being able to "get there" is something that only "rich people" somewhere out in rich land can do. Not us. No. It is our destiny to work for an hourly wage that goes down every year (because we are in Italy) and accept our lot in life.

But I don't give up so easily. I pick up my journal again and again and again and I work out the numbers and try to work out how I can successfully replace my income with passive income (lower taxes and less work). Then I realized that I was coming at it from the wrong direction.

I realized I don't need to replace my income. I only need to cover my expenses. And my expenses are a completely different number than what I actually make on average because I do the one thing that ensures effective wealth building: I spend less than I make.

So I put together our fixed costs and came up with an insanely small amount that we actually spend per month then I added a good cushion to cover things like eating out (but once a month instead of once a week) and other "fun" spending. Once I did this, I started looking at what would be left over and how long it would take me to pay off my house, then buy another apartment for rental income (Italians are risk-averse, so property is an easier sell at my house).

Basically, the cheapskate blogs say it takes 7 years of living off of 30% of your income to retire (which does not mean "collect unemployment" it just means not have to work because your expenses are covered by passive income). When I did the math I found that I could pay off my house in 4 years (instead of 15) and then take another two and a half years to save up for another apartment to cover what is left of my expenses after my house gets paid off and including the small income I get from an apartment I already have. That means NOT SEVEN YEARS, but LESS!

Of course it means I would have to eat out less (which makes me hungry) but I think it would be worth it.

Then I realized that the money I get back each year from doing home improvements on my house over the next ten years gives us exactly the same amount of money that a rental would.

Incredible.

You just have to do the numbers. And live on the ultra cheap. More information on what that actually means as well.