RPF0573-Can_You_Afford_to_Work_9_to_5
00:00:00.000 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,
00:00:04.760 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:10.600 | building a plan for financial freedom in 10 years or less.
00:00:14.080 | My name is Joshua.
00:00:15.080 | I'm your host.
00:00:16.080 | And today I want to share with you one couple's story and their answer to a question, namely,
00:00:22.520 | can you afford to work nine to five?
00:00:25.160 | I'm often struck in my own personal perusals as I enjoy reading older books and older magazines,
00:00:33.560 | I'm struck at how little is new.
00:00:35.760 | Truly, I think Solomon had it right in most things when he said, "There's nothing new
00:00:40.240 | under the sun."
00:00:43.040 | Much of many of the questions, much of the advice that we receive and give in today's
00:00:48.040 | world, it's not new.
00:00:50.240 | It's just a slightly different variation of what's happened before.
00:00:54.000 | I recently was reading an older book, a compendium published 35 years ago by Mother Earth News.
00:01:02.920 | And in this compendium of articles, I was struck by so many of the articles and how
00:01:08.120 | applicable they were to today's world.
00:01:10.880 | The same problems that people were wrestling with back then are the same problems that
00:01:14.640 | certain people are wrestling with today.
00:01:17.240 | I have a soft spot and an interest in reading some of these old back to the land stories.
00:01:23.080 | And even the current back to the land stories.
00:01:25.320 | But when I use that phrase, I'm referring to the movement that came out of the 1970s
00:01:28.960 | and the 1980s with a fairly broad section of US Americans trying to pack up shop and
00:01:36.640 | leave the urban centers and move out to the country.
00:01:39.360 | And it was a movement of mixed success.
00:01:42.320 | There certainly were some people who were able to make a go of it, but there were a
00:01:45.760 | lot of people who really failed.
00:01:47.960 | And I think the reason many of them failed was the inability to create an income in a
00:01:52.320 | rural context.
00:01:53.320 | It's a problem that people in a rural context frequently face.
00:01:56.880 | And it's a problem I think that has new solutions in today's world.
00:02:01.160 | The challenge is if you're going to move out into a rural context, how are you going to
00:02:05.400 | provide a living for yourself to be able to buy the things that you need to buy?
00:02:12.360 | If you want to be the poorest person in the world, just go and become a subsistence farmer,
00:02:17.360 | trying to be 100% independent and self-sufficient, and you will live a lifestyle of poverty.
00:02:23.560 | It is impossible to be wealthy and to live a fully independent, self-sufficient lifestyle.
00:02:31.040 | So the challenge is how much dependence do you build?
00:02:35.760 | And many people want to go out and take responsibility for many of the functions in their life, but
00:02:40.360 | they still need some source of income.
00:02:42.480 | And one of the major areas where the back to the land movement of the '70s and '80s
00:02:46.480 | came to really break down was how to create that income.
00:02:50.200 | If you want to move into a rural context, you're limited to either selling your services
00:02:55.720 | or certain products to create cash for yourself.
00:02:59.200 | In selling services on the job market, a job market in rural areas where land is cheap
00:03:05.360 | usually is much more constricted than in an urban market.
00:03:10.560 | And usually you can't do quite as well with your specialized labor as you can in an urban
00:03:15.640 | area, so your wages are likely to be lower or non-existent.
00:03:18.600 | And the same problem you face with products.
00:03:21.600 | Many of the products that you could sell in an urban context frequently just aren't saleable
00:03:25.840 | in a rural context.
00:03:27.960 | But I think we have new solutions now.
00:03:30.120 | And although there have always been people who figured out how to go out and move to
00:03:34.080 | the country if that's what they wanted to do, there have always been people who've been
00:03:38.160 | able to do that, whether they worked the mail order business or they did their work by correspondence.
00:03:43.720 | There are a bunch of models that I've found from the old days.
00:03:47.360 | But today it's much easier because you can take almost any mainstream profession today
00:03:52.200 | and digitize it in some way.
00:03:54.900 | And if you can digitize that work in some way, then you can disconnect yourself from
00:04:00.160 | a geographic location.
00:04:02.160 | In the early days of online businesses, when I first became interested 15, 20 years ago,
00:04:07.040 | you basically made your money by teaching people about online business.
00:04:10.680 | And it was a very new and weird thing.
00:04:12.640 | But today it's a very normal thing.
00:04:14.720 | And there are dozens and dozens, a lot of paths into that type of lifestyle.
00:04:21.380 | So in reading these articles from this compendium, I was struck by a few of them in particular.
00:04:26.880 | And this one that I'm going to share with you today is called, "Can you afford to work
00:04:30.300 | 9-5?"
00:04:32.640 | And the article succinctly demonstrates something that I've talked about extensively on the
00:04:39.280 | show.
00:04:40.700 | One of the challenges with rural living is creating income.
00:04:44.860 | One of the challenges with urban living is creating savings.
00:04:50.280 | Because it seems like the whole urban lifestyle that so many of us are accustomed to is built
00:04:56.280 | around constant and never-ending consumption.
00:05:00.760 | And in a way, you are like a hamster on a treadmill, or on a wheel, constantly just
00:05:06.880 | going around and around and around, but not making any progress.
00:05:09.840 | It doesn't have to be that way.
00:05:11.960 | But a lot of people start to wake up and look around and say, "I'm just getting older and
00:05:15.600 | older and I'm not making a lot of progress.
00:05:17.560 | I'm not saving a lot of money.
00:05:18.720 | I'm not living the life that I want to live."
00:05:21.240 | And that's what the Back to the Land movement of the 1970s and 80s has in common with the
00:05:25.560 | Back to the Land movement of today, 2018.
00:05:29.080 | People are still looking for that sense of an appropriate pace of life.
00:05:34.280 | And again, my personal ambition is to be a gentleman farmer.
00:05:38.000 | I think that's a great pace of life.
00:05:40.760 | You have time for physical manual labor and time for intellectual stimulation.
00:05:43.920 | In my mind, that's ideal.
00:05:46.040 | Let me share with you this article because it's super fun to read other people's contexts
00:05:51.000 | from many years ago, but then to apply them and to think about them in today's world.
00:05:56.320 | So enjoy the lower numbers and recognize the constant and never-ending destruction of your
00:06:01.520 | wealth that inflation brings.
00:06:03.120 | I enjoy listening to the older solutions.
00:06:05.840 | And then think about your own situation and see if you have some creative ideas to work
00:06:10.440 | in your own context.
00:06:12.120 | The article is called, "Can You Afford to Work 9 to 5?" from a Mother Earth News publication
00:06:17.680 | published back in the mid-1980s.
00:06:20.680 | While many people yearn for a lovely and conventional suburban home with a predictable 9 to 5 routine,
00:06:27.040 | that kind of security had lost its charm for at least one couple.
00:06:31.160 | Their dream was of a place in the country and of a way of life inextricably bound to
00:06:35.320 | the land.
00:06:36.720 | Both husband and wife were employed, but after each tightly scheduled and often unsatisfying
00:06:42.640 | day, their dream of a simpler existence had become ever more appealing.
00:06:48.600 | One night, the wife, armed with pen and paper, decided to analyze the economics of the job
00:06:53.240 | she held.
00:06:54.520 | She had been hoping that it was helping them to reach their "back to the land" goal, but
00:06:58.360 | her computations indicated otherwise.
00:07:01.080 | The hard, cold figures showed that she was not only failing to save money toward the
00:07:05.840 | goal, but she was actually spending more money on job-related expenses than she had supposed.
00:07:11.280 | Her startling discovery was that she could not afford to keep her job.
00:07:16.360 | Her salary as a teacher totaled $9,000 a year, yet her spendable income, consisting of net
00:07:22.520 | wages minus work-connected expenses, came to only $2,530 annually.
00:07:29.600 | The cost of working was quite amazing.
00:07:32.400 | Here is how her income was being distributed before any personal expenses.
00:07:36.560 | Salary $9,000 State and federal taxes $1,500
00:07:43.200 | Car payment $135 a month for $1,620 per year
00:07:48.720 | Gasoline for commuting at $160 a month = $1,920 per year
00:07:54.800 | Auto repair tolls miscellaneous $480 per year
00:07:58.680 | Vehicle insurance and registration $350 per year
00:08:03.240 | Working wardrobe repair cleaning $600 per year for total work-related expenses of $6,470
00:08:09.960 | $9,000 of salary less $6,470 of work-related expenses = a net spendable income of $2,530
00:08:22.240 | She decided that if there were no greater benefit than that to be had from her 9-5 routine,
00:08:27.920 | it was time to let go of it.
00:08:29.760 | So with little hesitation, she did just that.
00:08:32.600 | From then on, she managed to augment her husband's salary by cashing in on her love of horses.
00:08:37.680 | Years of training and riding, combined with her teaching experience, blended to produce
00:08:41.600 | a career instructing young horsemen and horsewomen that provided not only an income, but lots
00:08:47.760 | of outdoor activity as well.
00:08:50.320 | The new "job" also afforded her more leisure time to develop home and garden skills that
00:08:56.920 | helped to stretch what money she did bring home.
00:08:59.720 | The new occupation eliminated the need for a second family vehicle, so they were able
00:09:03.680 | to barter their car for two acres of remote New Hampshire land.
00:09:07.720 | Once they acquired that property, they immediately wanted to relocate to it, and upon closer
00:09:11.800 | examination of the husband's earnings, they realized that the idea of simply packing up
00:09:16.880 | and trying to make do in a rural setting wasn't too far-fetched at all.
00:09:22.640 | The following figures demonstrate how much of his income was being used each year to
00:09:26.640 | do no more than maintain their suburban lifestyle.
00:09:30.960 | Salary $16,550 per year State and federal taxes $1,800 per year
00:09:38.960 | Mortgage payments at $235 a month $2,820 per year
00:09:44.840 | Property taxes $1,200 per year Electricity at $75 per month $900 per year
00:09:52.960 | Telephone at $40 per month $480 per year Oil heat $1,000 per year
00:10:00.520 | Truck payment of $107 per month $1,284 per year
00:10:06.120 | Gasoline at $100 per month $1,200 per year Truck repair miscellaneous $360 per year
00:10:14.220 | Vehicle insurance and registration $350 per year
00:10:18.560 | Food at $250 per month $3,000 per year
00:10:22.520 | Dining, local travel, entertainment $1,200 per year
00:10:26.760 | Clothing $480 per year A $16,550 salary less total living expenses
00:10:33.480 | of $16,074 equals a net spendable income of $476.
00:10:41.080 | Faced with those facts, the couple made the decision to abandon their suburban way of
00:10:44.880 | life.
00:10:45.880 | They sold their house and moved on to the two paid-for country acres, where they built
00:10:49.880 | a small, mortgage-free camp.
00:10:52.820 | They now cook with bottled gas for a mere $6 a month, and their light is produced by
00:10:57.700 | economical kerosene lanterns.
00:11:00.100 | A small barrel stove has taken the place of a costly oil furnace, and wood obtained through
00:11:05.100 | barter provides all their heat.
00:11:07.240 | A brook on the property supplies all the water they need.
00:11:10.580 | The husband's financed pickup truck, and its accompanying payments, has been replaced
00:11:15.100 | by a used van (completely paid for) that has been converted into a camper.
00:11:20.120 | In a short time, the annual budget looked more like this.
00:11:24.220 | Present combined income $7,400 per year Rent and mortgage $0
00:11:29.860 | Car payments $0 Electricity $0
00:11:33.560 | Wood heat $0 Income taxes $120 per year
00:11:38.060 | Property taxes $75 per year Telephone (occasionally use of payphone)
00:11:43.940 | $100 per year Bottled gas and kerosene $120 per year
00:11:50.140 | Gasoline (errands and travel to seasonal work) $600 per year
00:11:54.520 | Vehicle insurance and registration $300 per year
00:11:58.140 | Food (to supplement the edibles they produce, hunt or forage) $1,400
00:12:03.260 | Clothing (leaving city jobs really cut this expense) $300
00:12:07.620 | So annual income of $7,400 per year, less total living expenses of $3,055 per year,
00:12:16.340 | equals a net spendable income of $4,345 per year, whereas previously the net spendable
00:12:23.220 | income from her job was $2,530 per year, and the net spendable income for him in his lifestyle
00:12:29.900 | was $476 per year.
00:12:33.340 | It's easy to see that their change of lifestyle has resulted in having more cash to spend
00:12:37.700 | than they did before.
00:12:39.320 | Because both are finally free of the 40-hour week, they can devote themselves full-time
00:12:43.580 | to gardening, foraging, fishing, hunting, freelance writing (which helps to pay their
00:12:48.960 | bills) and traveling.
00:12:50.780 | The couple's pleasure expenses have actually increased since their move to the country.
00:12:55.220 | For example, they rented out their camp, another source of income, while they spent a year
00:12:59.920 | exploring in Alaska.
00:13:01.900 | After three months on the road, with expenses totaling $2,900 for 12,000 miles of unforgettable
00:13:08.260 | experiences, they took jobs as caretakers of a remote cabin on the Alaskan coast.
00:13:13.740 | There they enjoyed the icy splendor of glaciers and snow-capped peaks while they continued
00:13:18.640 | to expand their knowledge and skills.
00:13:21.460 | This man and woman are living their dream, but what it took was the conviction to free
00:13:25.380 | themselves from the life they thought they couldn't afford to leave.
00:13:30.400 | Until they faced the facts and figures, they never realized the astronomical costs involved
00:13:35.140 | in maintaining a suburban lifestyle.
00:13:38.100 | It seems that the solution to money problems sometimes lies not in earning more, but rather
00:13:43.420 | in simplifying one's way of life and perhaps even earning less.
00:13:48.620 | Moving from a dwelling in an area with a high cost of living, to a dream farm or camp in
00:13:53.380 | the country, to that place where you can garden, cut your own wood, and possibly even raise
00:13:57.740 | your own dairy or meat animals may be the answer to your financial dilemma.
00:14:02.180 | In fact, you may be able to eliminate entirely that tedious 40-hour work week and meet your
00:14:08.340 | reduced expenditures with a part-time or seasonal job or a home business.
00:14:13.160 | The transition from a life in suburbia to one on the farm does take time, thought, and
00:14:18.420 | money.
00:14:19.740 | How much of each you'll need will depend on your skills, level of determination, desired
00:14:25.140 | lifestyle, and current equities.
00:14:27.900 | You may have to cash in some assets and deplete your personal savings, devote extra time to
00:14:32.200 | honing a talent that will bring in the income you'll require, and learn the skills necessary
00:14:36.520 | to live in harmony with the earth.
00:14:38.820 | Whatever method you adopt to rid yourself of those Monday morning blues, rest assured
00:14:43.300 | it can be done, and the entire process can prove to be an exciting journey, one that
00:14:49.220 | may far exceed all of your original dreams.