jesmine's journal

[jesmine]

I'm starting this journal to help myself process my ERE journey.

Pofile: I am a 34 year old male married for twelve years and no children. Both parents were Amish at one point but never officially joined the church. Except for two years, I lived my whole life on a 10 acre farm my great-grand daddy bought in the 40s. I am an INTJ, Enneagram type 6.

Skills: In the last two decades I did paid labor working as a dairyman, framer, roofer, siding installer, solar system installation, produce deliveryman, stone mason, apartment building maintenance guy, kitchen carpenter, and undertaker. Aside from paid labor I learned other skills of basic plumbing, vegetable gardening, horsemanship, basic automotive and tractor repair, welding, basic woodworking, freediving to 27m, home remodeling, rotational grazing, etc. I bicycled across the US, and learned to ride a 6 ft. unicycle.

Finances:
Assets:
$45k in 401k
$7K in IRA
$26K in checking
$68K in brokerage account
$75K in precious metals
TOTAL NET WORTH: $221K

Current job $50/hr @ 40+ hrs/week. Four-day work week. After taxes wage income = $1500/week.
DW income is around $12k/year
No outstanding debt.
Biggest liabilities: Food, transportation, rent
Total liabilities(living expenses) for DW and I in one year = $24,000

Goal: I want to be able to SWAN while not needing to work for income.
Two years ago, my wife and I committed to one year of not working for income. We sold the car and lived for a year doing whatever we wanted. It was a very enlightening, enjoyable experience. The last month was the most uncomfortable. Knowing I was going back to work for the sole purpose of making money caused anxiety and gave rise to a desire to quit the "vacation" early so I could "get on with it already". As soon as I can SWAN, knowing I don't NEED to do anything for money, I'm ready for the next phase of life.

[jesmine]

The most pressing issue to address at the moment is our living arrangement. At the moment, my parents own the farm property which consists of a main house and barn, a greenhouse, and another house with the apartment we are living in. The current verbal agreement for the last ten years and currently is that in exchange for renting the farm, I will pay property taxes, maintain the buildings, manage the farm and pay utilities. At my parents' decease, I will inherit the property. For many reasons, this arrangement is rife with potential problems. The property was recently appraised at $1.15 million. We are working with attorneys to avoid 4.5% inheritance tax and eliminate the possibility of dad changing his will at the last moment. We would like to do this by setting up an Option to Buy contract which would give me the option to buy the property for $1. Oddly enough, the Option to Buy contract at decease is very common in the Amish and Mennonite communities. It bypasses capital gains for the seller even if the buyer prepays on the principle, and bypasses inheritance tax while at the same time raising the tax basis of the property to be equal to the appraised value. Still looking into this.

It would seem at first glance that I would be INSANE to refuse such generosity from my parents. Acquiring a $1.15M property for no downpayment, no principle, and no interest payments.

This type of arrangement is not well understood by mainstream American culture anymore. When was America no longer agrarian? Stewarding financial capital has become a major industry. Social capital is somewhat resistant to financialization, and in this case, built up and maintained by the example of elders in relation to their young. I saw dad manage the farm and his finances while granddad and grandmom become old and passed, and now my wife and I are the next in line. Only if we want it.

Oddly enough, bringing clarity to the arrangement is simple. Difficult, but simple.
My practical skills will take me a long way. My soft people skills need some help.

Skills to Acquire:
1)Learn how to become aware of obligations and expectations.
2)Learn how to identify unspoken obligations and expectations.
3)Learn how to negotiate.

David Graeber has some good insights on this overlap of social expectations and financial contracts.

[loutfard]

Thank you for sharing your story. I'd be interested to read the next episodes.

[jesmine]

I am beginning to realize that I'm much closer to ER than I may want to admit. Sub-letting farm buildings and and renting the main house on airBNB will alone provide enough income to cover all our expenses and maintain the farm if I do the labor. Maintenance is fun and fulfilling. I'm good at it and I love it. I feel in my gut that saving more cash for a CD or brokerage account isn't really solving a problem that exists.

I'm not sure exactly what the holdup is. Why don't I quit my job if I could? Quitting the job feels like letting money sit on the table. I have this fear that in the future I will need to withdraw from savings to solve a problem. At this point, I would interpret going back to work as a failure to plan adequately. I may be falling prey to the "I might need it someday" trap. Maybe the only real reason I enjoy working is that it dissuades me from fearing falling short on cash income. I don't think I would be feeling this is if my parents were not living on the premises, even though I technically don't have a financial obligation to them. Even though they are about to sign papers to give me the Option to Buy for $1 at their decease, it seems as though I'm freeloading off of them and I'm not truly self accomplished. For a number of years I've only worked three days a week away so that I could better take care of the farm. Looking back, if I would have worked for money instead of "sinking" time and labor into the farm, I would have an additional $300k pretty easily.

So if I would quit my job now, I would feel like a freeloader somehow. I want to deserve what I have, not rely on the generosity of others. OTOH, I've been extremely generous by being willing to maintain and manage a property for a decade that was not legally mine. That had an opportunity cost, and a big one at that.

Looking back it was unwise, but here we are.

[thegoldenpath]

I would offer some thoughts regarding you thinking about your decisions being unwise. This goes into some of what you were saying about success in my journal. While I have never been a farmer, I've worked around people who farmed and I feel no qualms in saying that after a decade of farm work you definitely gained at least 300k worth of skills. It also seems like you have a robust social capital with your family. You're concurrently expressing feeling of being a free loader and having surrendered massive opportunity costs with regards to your family. Perhaps its "balanced"? Do your parents think you're freeloading? I think you may be far more successful than you think.

[delay]

Welcome and thanks for sharing your story!

Current job $50/hr @ 40+ hrs/week. Four-day work week. After taxes wage income = $1500/week.
DW income is around $12k/year
Total liabilities(living expenses) for DW and I in one year = $24,000

Sounds like your income is 48*1500 + 24.000 = 96.000 a year. You spend 24 out of 96, so that's a (96-24)/96 = 75% savings rate. That's pretty good.

Maintenance is fun and fulfilling. I'm good at it and I love it. I feel in my gut that saving more cash for a CD or brokerage account isn't really solving a problem that exists. ... For a number of years I've only worked three days a week away so that I could better take care of the farm. ... So if I would quit my job now, I would feel like a freeloader somehow.

There are other income options besides 40 hour jobs or investing in the stock market. Taking care of a farm is certainly one of them. If you enjoy that, why not move in the direction of taking more care of more farms?

Goal: I want to be able to SWAN while not needing to work for income.

What does SWAN mean?

[thegoldenpath]

SWAN= sleep well at night. A personal metric that means your personal finances are in a state as to cause you no worries as it were.

[jesmine]

Do your parents think you're freeloading?

Not at all.

On a different note... I've never been really very particular about reviewing expenses and income. We write down everything we spend in a budget book but I never really took a good look at it. I think that reviewing expenses/income MONTHLY will 1) help me to question some spending habits 2)give me more confidence to quit my job after income from assets is adequate because average monthly expenses are so predictable 3)eliminate guilt about spending habits I "knew" were expensive, but after doing addition finding out it's peanuts. 4)focus on the low hanging fruit(easiest things to cut/change) 5)observe the stability and rate of income from assets.

[jesmine]

After reading jacob's post where he said,

I'll say that I for one have come to the point where "enough is enough". When it comes to letting "team" interfere with "important work", my strategy is now to avoid dealing with "fools" as much as possible. There's just no way to win. The more things change the more they stay the same. I don't believe that new methods like sociocracy or @riggerjack's software-to-be-invented (but good luck!) will change things, so I now prefer to work around it; building a moat between myself and the fools.

I have finally come to realize why our living arrangements, tied so closely to social capital, bothers me so much. I absolutely despise picking up the tab for the "team" when the "work" isn't getting done. If the "work" is getting done, then I'll do anything for the "team." This will bring clarity to my strategy going forward since I can be aware that even though I love living with family, I will no longer try to trick myself into thinking that there are no fools on the team. In order not to compromise on our values of financial autonomy and personal autonomy on the ERE road, our lifestyle design needs to account for the fact that the people we are essentially inheriting the farm from make foolish financial decisions, i.e. sell the farm to me for $1.

But from their perspective it looks more like, "we really want jesmine and his DW to stick arounnd because he has all these skills we benefit tangentially from, and we don't really want to care for or manage the farm ourselves. Additionally, we don't have the imagination to think about how our life could be different because we've lived here for 60+ years. We feel no additional security in having more than 300k in the bank. Moreover, we value the fact we can live in peace and quiet on the land we inherited from our parents knowing jesmine and his DW will take care of the place and we can die without a care in the world. And if we need a little help in our old age, we've got someone with a strong mind who can help us figure those problems out when we get there."

The question for me, is can I win in this scenario. I totally vibe with the "build a moat between myself and the fools" strategy. Removing oneself completely from the land of fools cannot be done, for wherever you go, fools abound.