Millionaire Librarian

There are many different flavors of Financial Independence, and I have taken parts from many of them.

ExpatFI promotes moving to a lower-cost-of-living country to arbitrage your finances and retire earlier or a little earlier. There are a dozen different items you need to consider, like visas, languages, weather, and currency risk. Our move to Cuenca has been one of the best choices we have made.

LeanFI promotes stoicism and simplicity. I’m naturally a pretty frugal person. I tend to enjoy music, reading, writing, and learning. None of these things are very expensive. You generally do not get to early retirement as a librarian without being pretty frugal. However, I have noticed that the longer I am retired and the more our net worth increases, the less frugal I have become. I enjoy the convenience of eating out, weekly cleaners, a gardener, preschool, and my daughter participating in ballet and speech therapy to help with her Spanish. These items are also much less expensive than in the States. We have met other families who I think take this to the extreme in Ecuador by having live-in nannies and chefs who cook all their meals. For us, we prefer to have our privacy.

Now, with our jobs, I guess we are technically CoastFI because almost all our expenses are covered by our jobs. Adding in a couple of part-time jobs helps smooth the ride, and I don’t feel obligated to try to save a large percentage of our income anymore. Our portfolio is free to work and compound in the background.

We also have real estate and a plan to buy more. I don’t think there is a specific FI for people with rentals, but despite the extra workload, I think it is one of the best ways to be financially free. It is great to have some small income coming in, whether that is a pension, a part-time job, or a few rentals. Something that moves independently from the stock market, which might take a little work.

I also plan to only have a few rentals at most and focus on paying them down faster. The primary reason for this is more income or cashflow because I don’t have a loan, and generally less risk. Also, it is less work. Having 3 paid rentals you self-manage where you might net 2–3k after insurance and taxes is a great tradeoff. There is also the possibility of having someone manage them for me at some point.

Rentals also can be nightmares. You hear about repairs, and those do come along and can sometimes be expensive, but the real danger is buying an alligator. This is generally a property that negatively cashflows, meaning it doesn’t pay for itself. I have a friend who tried to get into real estate, and they barely make any money off their rentals in good months, and then a major repair comes along, and they need to get loans to pay for the repairs. They can’t sell the houses, and they just sit on the market with no one wanting to do the repairs themselves. Rentals are like chainsaws: powerful, but you need to know how to use them.