We’ll be disconnecting the internet in a few minutes (the furniture is long gone, so I’m sitting on the floor while Joe naps with cats on a towel) so this will be the last post from Dauphin!
In 90 minutes, we’ll catch the little commuter plane to Winnipeg and spend a couple of nights there before we fly to Boston Thursday morning.
Just thought I’d say goodbye! (I’ll post pictures of the empty house and our last few hours when we’re settled in Winnipeg.)
The Summerside PEI home (more about the house itself later) will be house #10 for us. Even though we’ll go back down to only owning 9 when we sell the one we currently live in, 10 is a nice little milestone for us.
When we envisioned the Dauphin experiment 5 years ago, we didn’t expect our money would come from real estate. We just thought that the best way to reduce our living expenses was to own the cheapest house we could find. Of course, that didn’t mean buy the $24,000 house with the sagging foundation – that ain’t cheap! It turned out to be a $35,000 structurally sound 625 square foot house being sold by the bank as a foreclosure property.
We purchased that home a good 3 years before we were able to disentangle ourselves from Toronto. (Sidebar: last time it took 3 years to free ourselves up from our lifestyle, finances, commitments etc. This time, it took about 6 weeks. Life simplification, FTW!) For the last 2 of those years, we rented out the house. It didn’t always go super smoothly, but there was never a shortage of tennants. So, about a year before moving, we purchased a second home that we believe was quite undervalued. It, too, was instantly rented and has never been vacant a full month since we’ve owned it.
This demand for rental property combined with sub-$40K houses = great big win. It was the rental income from these properties that allowed us to retire, even though we’re not rich. We have no mortgages and a lifestyle that is completely subsidized. We watch the news about the tanking economy, and know that it doesn’t affect us (until we can’t get the products or services we need). We have it pretty darn good. Garth Turner would be proud. So, why move, and especially, why now?
Sometimes I worry we’re being irresponsible, or that this move somehow goes counter to the philosophy that got us where we are today. The new house costs *over $100,000* not to mention the work we’ll need to do with it and the costs of moving. (People still laugh, but it’s over 3 times what we paid for the current house, and still causes a few heart palpitations!) When you pride yourself on your achievements in downsizing and minimizing, there’s a certain guilt that comes with moving back up the property ladder.
I think we were proud that we got by with the minimum requirements, moved to the middle of nowhere, lived in essentially a 3 room house (Joe’s office, bathroom, rest of house) and sacrificed the ability to “go out” anywhere, really. (There was no where to go out.) It was sufficient, and it allowed us both to retire well before our 35th birthdays. We also created this blog about the process, so pushing the envelope with respect to our home life has become a part of our identity.
But, just like the $24K house with the unstable foundation isn’t really cheaper than the structurally-sound $35K house, the house in Dauphin costs us a LOT in travel time, money and energy that should be greatly reduced after the move. The tiny commuter airline to and from Winnipeg only runs twice a day on weekdays (makes it difficult to arrive at a client site on Sunday or return home from a work week on Friday) and the train only runs 2 – 3 times per week. Consequently, we end up spending more weekends in Winnipeg than anyone should have to, and we also end up bundling our travel together so that we minimize the Dauphin-Winnipeg legs taken. This means leaving the cats alone for long stretches of time (don’t worry, friends check in daily on them!) and most recently left us the victims of a home robbery. (We narrowed down the time frame, and the burglars came during the weekend we were stuck in Winnipeg waiting for us to get home, not while we were away on the trip itself!)
Without meaning to slag Dauphin, there’s another hidden cost we’ve incurred – people just didn’t want to come visit us. All of the sudden, we tell people we’re moving to PEI and now *everyone* wants to come! And, we’ve allowed ourselves to purchase a home with room for them to do so. What’s the point of moving somewhere “different” (I wanted to say “exotic” but somehow it didn’t seem quite appropriate for Dauphin) if you can’t share it with people and use it to inspire them? For the first year or so, I was really excited about Dauphin because of what it offered us. But, we were always met with, “I could never move there,” or “You’re so brave/disciplined/resolved,” which I know was meant to be a compliment but just further emphasized that our choice wasn’t somehow “desirable” and that we needed to be commended for surviving/sticking it out. And especially since finding willing house sitters is integral to our travel strategy, living in a desirable location goes a long way to allowing us to travel for extended periods of time.
So, we’ve decided that this move doesn’t run counter to our initial ideals. Rather, we’re simply opting for the next version of the $35K house strategy. The potential closure of the bowling alley in the next few years, the increased time and expense traveling, the unwillingness of friends and family to come visit (and no where for them to stay in the house, even if they did) is simply too shaky of a foundation on which to continue. It’s a completely responsible choice to purchase the more expensive house (that is well within our cash budget to avoid a mortgage) in order to avoid dealing with these “structural” issues.
I’ll sure miss my cork floors, though!
Not to say that we didn’t research the move to Summerside fully before taking the plunge, but now that we’ve decided to go for it, here’s just some of what else we’ve learned about our new town that makes us super excited to move:
) I actually thought she meant moo moo cows. Apparently, though, Cows is a PEI company making natural ice cream. Who can argue with that?
So, the obvious question is, when are you coming to visit?!
After about 21 months, we have decided to enter the next chapter of our lives by ending the Dauphin experiment. We have purchased a house in lovely Summerside, PEI, Canada, and plan to move there next month. From today, we live only three more weeks in Dauphin, and of that, we spend a week on the road.
I declare the Dauphin experiment a rousing success! We lowered our basic cost of living to around $20k/year, which greatly increased the utility of every dollar we earned while we lived here. We bought our first house and paid only $35k for it. We hope to sell at a $5-10k profit once you include renovation expenses. On July 1, 2007, Sarah retired, and I followed on April 1, 2008. Since then, our rental properties have generated more net after-tax income than our basic cost of living. We made our first foray into business ownership with the Academy of Learning, and while that failed, we learned, although this time perhaps not cheaper than an MBA. I bowled in a league for the first time since 1996 or 1997, I can’t remember which, and while I will finish the season with an average right around 200, I’m told that Parkway Lanes in Dauphin is a tough house and that I can expect that average to rise when I bowl elsewhere. I’ll believe it when I see it. We lived through a home renovation, we survived our first break-in, we bought our first steam shower and flat-screen TV… it all worked well.
So why move?
We had three reasons to move to Dauphin: low cost of living, bowling, houses under $50k. We had to sacrifice a few things to achieve our goal of early retirement: Dauphin has no book shop, coffee shop, movie theater, pool hall, Staples or public transportation (although the taxis come close). To travel for work or pleasure we have to either spend four hours on a Greyhound bus, or $800 round trip on flights and extra nights in the hotel. We happily sacrificed those things for what we got, but we made a few assumptions: first, that we’d travel only 2-4 weeks per year because of the low cost of living and the emergence of passive income streams; second, that I’d bowl in leagues here and eventually return to provincial competition; third, that we’d be happy with a small house. Of these, the first two have fallen away. Since we retired, we’ve traveled 50% of the time, not 5%, so living 400 km from Winnipeg airport has created a number of problems. I have learned that Parkway Lanes might close in the coming few years, which, combined with my not driving, would mean I couldn’t bowl. That meant we needed to look for somewhere to live with a similar cost of living and a stable bowling culture.
Enter Summerside, Prince Edward Island.
Yes, it surprised me, too. Sarah worked her research magic and within what seemed like minutes, we were working with a real estate agent. In early February our plan was to visit Charlottetown and Summerside in the spring, perhaps buy a house, then move in late summer. Instead, Sarah found a 1500-square-foot house less than 1 km from a bowling house, pubs, markets, a pool hall and less than 100 m from water. It sounded great, so we bought it. We then realized we could move in as soon as mid-April, which meant leaving here March 25 and not looking back. It has happened that quickly.
When we sell our house in Dauphin and one other property that isn’t generating any revenue for us, that will give us about 80% of the price of the new house in Summerside. We still won’t need a mortgage, although we’ll borrow on lines of credit for a few months. We will still have $30-35k/year in gross passive revenue of which 10% will go to a property manager and the rest will let us continue to retire. In a year we will recuperate our cash position, even including moving expenses and immediate repairs on the new house. We will retain our financial freedom while drastically improving our quality of life.
So, in about five weeks, we live there now.
There was a great post on Treehugger recently that I’ve bookmarked for more serious contemplation.
Although they may be neither popular, nor well known, there are alternatives to the two major housing options of “buy” vs. “rent.” It seems like every day I personally vacillate between wanting to live in a Parisian apartment overlooking local markets and wanting to live on a lakefront, almost cottage-y property. In the first case, we’d walk everywhere we needed to go and in the second case we’d generate our own electricity and grow some of our own food. I just can’t decide whether I want to live with people or get the heck away from them.
We’ll likely be where we are for some time to come, but Dauphin was always a calculated, strategic move. So far it has pretty much worked according to plan. We’re closing on houses #8 and #9 on August 1, and our rental income will provide more than we need to live comfortably there. And for the total cost of all 9 houses we’ve purchased, we still would have been only able to buy the most entry-level of entry-level homes in Toronto. (And, that would be with us paying for the privilege of ownership, not being paid enough that we don’t have to work!)
As I said to Joe last night, although yes, we can consider ourselves “retired” from traditional careers, our “job” right now is to figure out where we really want to live next and how we will be able to afford it. It’s not as easy as you might think, and you really do need to be semi-retired before you can tackle that task; you can’t know what you really want out of living when don’t yet have the freedom to just “live.”
If I were still tutoring, I would be too busy and preoccupied to really think about what I wanted out of a house, community or local environment. How was I to know, for example, that I really don’t mind “cooking*” when my previous life was arranged in such a way that preparing food was nothing but a huge inconvenience? When I had taken probably less than a dozen baths in my whole adult life (and had never seen Joe take a single one!), how was I to know that we would treasure our jacuzzi tub? There is a lot you discover about yourself when you stop “working” and start doing what might be work for some, but is really just an activity for you.
That’s why I don’t think of it as a “failure” that Dauphin won’t be the place we live for the next 30 years. Rather, moving somewhere that is decidedly not our retirement paradise was the smartest thing we ever did:
And, if home ownership in Dauphin means we get to travel like this, then maybe there’s even something to be said for not doing too much of your “living” where you live!
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* – I still hate “cooking” and will refuse to prepare anything that involves the actual cooking of meat. And, much fewer of our meals are actually “cooked” now since we’ve been eating a lot raw. So, I use the word cooking to mean “making meals.” But, what I have discovered is that I like the act of chopping vegetables, I don’t mind boiling things into a soup and as long as Joe’s not sick of honey-mustard, I’m quite happy to make our own salad dressing.
Free Money Finance posted the 10 most hated money-saving tips according to the comments he’s received over the years, writing over 700 tips.
These aren’t necessarily earth-shatteringly new strategies, but that’s not the point of this list. The point is, these are the common-sense tips to which people claim to be decidedly immune. Do check out the list for yourself, but noteworthy for us is that sitting in the number one hated money-saving tip:
1. Move to a lower cost-of-living city
You can’t say we didn’t invite y’all. That you refuse to take us up on it only leaves more houses for us. (Closing on #6 and #7 currently, by the way.) 
We don’t really have that much snow, but the temperatures are cold enough to keep what little there is on the ground. It’s been enough to force me to buy boots, but not a winter coat yet.
More excitingly, though, is that we finally got the rest of our stuff moved in! There wasn’t really all that much — maybe 15 medium and small boxes, but the big ticket items were the key: kitchen pantry, dressers, Joe’s organ and the Sumo!
Clothing-wise, we’d gotten very good at living with whatever a medium-sized suitcase can hold. It now seems both ridiculous and obscene that I unpacked a dresser drawer full of only socks, underwear, nylons and pyjamas. For the last six months, I’d been living with less than that in total.
As much as it bothered us to be without our stuff, for me at least it was more annoying because it was a sign that things weren’t done yet. For sure, a dresser is far better for clothing storage than a rubbermaid container on the floor, but I’m not as thrilled about the literal “baggage” that came with it. Yes, it’s nice to own some clothing with sleeves now (remember, the suitcase was packed in June!) but it will be interesting to see how much of it I keep, or at least keep out and not in storage in the basement.
Despite all the frustration over delays with finally “moving in” I know for me, the experience of “living without stuff” was very rewarding. This coincides nicely with our family’s new “pick one couple to buy for” rule. We already bought Mom and Dad’s gift, and I’ve already ordered Joe’s, so my holiday shopping is done! It’s not that I would have minded buying more gifts for more people, but I just don’t feel a need to. And, I certainly don’t want more crap filling up our little house. There are still some things we need. (or do we . . . ? The jury’s still out on that one.) Joe won’t complain about the addition of anything fleece to our household. But otherwise, I think we’re doing pretty well and have managed to adopt the change in lifestyle we were hoping we would.
Sarah and I live in Toronto, Ontario with our four cats in a rented basement apartment below Sarah’s business venture, Mostly Math. It’s a fine existence, but it’s pricy. We don’t really take advantage of living in the city anymore. Our life revolves around a 5.5-km stretch of Sheppard Avenue East, from Yonge Street to Fairview Mall. I would estimate that we spend a few hours per month away from that stretch of road. This is one of the many reasons we’re moving to Dauphin, Manitoba this summer (2007).
Yep, the corner of Nothing and Nowhere. At least, compared to Toronto.
I would say the primary motivator for leaving the city is financial: we want to own a house, but are not prepared to pay $400-500k for “something decent”. That kind of mortgage is a death sentence for us, given that our goal is financial freedom before age 40 (the year 2014). Sarah, a born researcher and information junkie, found Dauphin on the web in 2004, so we visited it, looking for houses, a business, the possibility of a new life there. We liked what we saw.
In 2005, we acquired the Dauphin location of the Academy of Learning. This has been a definite learning experience for me, as I have never had employees before. Although our business is education, something both Sarah and I already do professionally, dealing with government education bodies is something Sarah already did and doesn’t want to do again. Not only that, but we’ve had to learn how to register for business in a new province and how to manage people from a distance of thousands of kilometers. Overall, I think we’ve done well. No-one has quit on us for incompetence, at least.
In 2006, we began renting out houses in earnest. We’d trifled with it previously, but we bought a second house in October and have happy tenants there. This has brought its own challenges, like dealing with highly transient tenants, handling late rent payments and the other joys of being a landlord. We are now preparing our first house for ourselves to move into this summer.
In 2007, we plan to simply make the transition and try to survive it. I’ll be frank: I’ve computed how long we need to stay in Dauphin before moving there and back becomes less expensive than staying here and renting. Still, I like the people I’ve met, I like the idea of a slower lifestyle and I like the idea of leaving in a well-renovated house we own free and clear. It will be enough, I think, to get through the first winter and enjoy our new life.
In 2008? Well, I have no idea. I’ll revisit that in about six months.
PS: If you don’t get the reference in the title, you must not be a fan of Frasier.
