A Ludicrous Plan for Financial Independence

I calculated my net worth today (something I do about once a quarter) and found that I could quit working if I was able to live on $436/month or $5240/year (based on a safe withdrawal rate of 4%). This is only about 1/5 of my actual expenditures, so I'm nowhere near actual FI. But for the first time I found myself thinking, "Well, I could probably do that if I was really desperate."

I know of at least one blogger, Annienygma, who lives on about $500 per month (she owns a mobile home, but it sounds like she bought it for as little as a couple thousand dollars). She lives what sounds like a pretty decent life but she lives somewhere in the south (ugh) and really skimps on air conditioning--I'm a huge wimp when it comes to climate control.

A few years ago when I lived in Austin, I think I could have squeaked by on $436/month (in fact, I may have--I was working part time for $7.50/hour). I sublet a studio for $300/month (a discount off the usual rent of $450), and had a friend who lived in a similar apartment where the actual rent was $300. I lived alone but the apartment could have worked for a couple. It had a decent kitchen and a largish main room--if I was living there with R., he could have part of the room as an office with room for a computer desk, I could work on the card-table sized kitchen table, and there would be room for a double bed (maybe a queen, but not our current king).

At that time, I was spending about $80 a month on groceries, a number I still think I could stick to these days (especially since back then I was eating cereal with soy milk every morning instead of oatmeal with water).

I didn't have a car. My bus pass was $10 per month, bringing expenses to $390.

That leaves $46, which is enough for the electric and gas bill in an apartment like that with a few bucks per month left over, depending on the time of year.

I could almost do that. I could live without home Internet service by walking to the library (which is exactly what I did back then). I didn't have health insurance, and if I was really financially desperate, would probably go without it again as I'm still young and healthy. I could live without eating out, or buying clothes other than an occasional Goodwill purchase.

But I don't think I could live without a phone. If I didn't have Internet, I couldn't use Skype. And without that, I don't think I could get phone service for less than $20-30 a month. Today, my cell phone costs me about $10/month, but that's if I only use it for about 100/minutes a month, which wouldn't be enough if it was my only phone (I don't make many local calls, but I don't think I would be willing to give up talking on the phone to my parents and brother regularly).

If I cut out the bus pass (which would suck in Austin, with its hot summers) or cut my food expenditures down to the bone, I could free up maybe $15-20/month for phone. If I could limit my phone time to 200 minutes/month (still a stretch--I typically talk to my parents about an hour a week, and like to talk to my brother a similar amount), I could do it.

Just for fun, I searched what I could rent in the Chicago area for $300. There was literally nothing as far as actual apartments go (well, one condemned-looking house in Gary, Indiana). One can find a few shares in that price range--if I was single, this apartment is close to where I live now and the poster doesn't sound too crazy (though "dog-friendly" makes me worry that she has a large, enthusiastic golden retriever).

I guess I'm not even financially independent at a ludicrous level yet. But I'm getting there.