Will Roots In A HCOL Area Hose Our FI Plans?

crispydoc Uncategorized 6 Comments

How important is putting down roots in a community to your life objectives? The question was underscored on reading a recent guest post by Jacob Lund Fisker (of the legendary Early Retirement Extreme blog) on Get Rich Slowly.

Jacob is a theoretical astrophysicist who studied at Berkeley and achieved FI before eschewing academics for a life pursuing interests independent of the need for income.

He established a rational philosophical framework that complemented the mathematical underpinnings of FIRE, answering the why in addition to the how.

Jacob detailed how he has lived on about $7,000 a year starting in the costly San Francisco Bay Area (trailer home) to his current house, paid for in cash, in the Chicago suburbs.

His update was a list of new skills he has mastered, new problems he has solved, and new opportunities he has availed himself of thanks to not needing money. They have ranged from racing sailboats, learning Japanese sword fighting, working as a quant in finance, self-taught bicycle repair, woodworking, gardening and manufacturing his own tools.

I am one of many who regard Jacob as a thought leader of anti-consumerist FI, yet I'll be the first to acknowledge his off the grid problem-solving has always appealed more in theory than in practice.

He walks the walk; I still drive it.

One of the other striking aspects of Jacob's life is the peripatetic nature implied in his preferred form of living. He and his wife have "itchy feet" and relocate every few years so that one or the other can pursue a passion project that requires a new geography.

This implies a deep understanding of what makes him tick and what makes him happy. He is an introvert who reads 100 books a year, and it would seem that he feels comfortable building community through his projects du jour. This led me to reflect on how I proceed building community.

It turns out my community building moves very slowly. After relocating every few years for my education, we settled into our home only to experience the isolation of being in a family cocoon with small children.

Our emergence from that cocoon was gradual, for a number of reasons.

First, there was an understandable wariness of others' motives for befriending a dual ER doc couple - we want to be friendly enough to invite to your party or confide your struggles, but not so accessible you come over uninvited late at night expecting free medical advice or drop our names (and our standing) at our workplace due to a bizarre sense of entitlement.

Second, as a middle aged guy who does not follow sports, it's hard to meet like-minded souls. Men don't go up to others they don't know and say, "Want to grab a coffee and discuss that new Jonathan Franzen book?" or "Does your work leave you feeling empty inside some days?"

Instead, those friendships developed over years, organically:

  • Taking a hike with someone else who gets random weekdays off and likes to stretch his legs.
  • Geeking out over personal finance at a kid party with someone whose interest is piqued so much that they ask me to coffee to continue the discussion of DIY portfolio management.
  • Answering a friend's questions over how we keep summer family travel affordable.
  • Being comfortable enough in my skin (using earplugs at concerts, letting it be known I bought my clothes at thrift stores) that it got the attention of other eccentrics who invited me into their circles.

I take pleasure in the roots we've put down and how we've managed to weave ourselves into the fabric of our community.

The danger, in returning to Jacob's "itchy feet," is that our connections have been created slowly. Since we forged them in a high cost of living (HCOL) area, we are bound to this community and would not easily depart it.

Is there a way we can use geographic arbitrage or cut costs in some other manner? I have a few fantasies I enjoy exploring, and I try to plant seeds in my wife's brain to give her time to consider them well in advance. All of them commence when we become empty nesters in ~8 years.

First we would rent our home as a furnished high end rental (goal being to save on storage costs by leaving furniture in place) with the hope that a high ranking corporate employee on a year's assignment in LA would rent it out. The rent we could command would likely cover our remaining mortgage and then some.

In the meantime, we'd move a few choice pieces of furniture to a nearby apartment that would serve as our base of operations for the year.

If we felt comfortable with the plan, I'd be fine renting. If my wife feels strongly, we could look for a good deal on a smaller, right-sized home to downsize into that remains in the area.

We'd then proceed to spend 3-6 months slow traveling through different domestic and international destinations that remain on our bucket list, which off the top of my head include but are not limited to:

  • New York City
  • Southeast Asia
  • Indonesia
  • Colombia
  • Mexico City
  • Italy
  • the Balkans
  • the Camino de Santiago in Spain
  • the Southeastern US
  • canyon country in the American Southwest
  • US national parks
  • Taiwan
  • Poland
  • Ukraine

The remaining 6 months (fall and spring, our favorite seasons in the area) we'd return to reside in our small local apartment. Most of these destinations would likely be associated with an expected reduction in expenses.

Like most travel-heavy fantasies, I fully expect we'll tire of constant movement after a while and figure out what balance of routine and novelty works best for us.

Depending on our tolerance for hassle, we could hire a service to remotely sublet the rental apartment on airbnb provided it was in compliance with local regulations to generate more income to support our travels.

This would satisfy the competing interests of keeping a foothold in a HCOL community we've come to love, yet also channeling our wanderlust while we have time and health to enjoy doing so.

Our roots have been slow to grow but have held fast once set down. Although it's expensive, we'd like to remain in this community until we leave it horizontally. Let's hope that day is in the distant future.

Comments 6

  1. There is nothing wrong with living in a HCOL area. Like everything in life it is a matter of choosing what you prioritize and then perhaps delaying or forgoing the things you do not.

    It seems you have built some strong connections where you are and that it would be painful to break those even if you could financially benefit from geoarbitrage.

    1. Post
      Author

      It’s a different sort of “moron tax” – an elective choice to pay more. In theory, we could have sought jobs and relocated to a LCOL place and developed ties to that community just as easily as this one. Local ties to family in California somewhat sealed our fate.

      I have no regrets, but I appreciate that our path might have been far more accelerated (see PoF) under distinct circumstances in a different geography.

      Might we have simply worked 5 years apiece as a two physician household before hitting FI? Sure, but it’s not about the competition (some smarter, more fortunate couple would have pulled it off working 4 years apiece immediately after).

      It’s about creating the life we wanted and making it compatible with a sustainable version of working in medicine. To that end, I attended this morning’s Halloween Parade at my son’s elementary school even as I helped my daughter refine her costume before she walked over to Jr. High School.

      Ours is a costlier version of parsimony (as Gasem would put it). As long as I get to allocate my time and feel more replenished than depleted, I can abide the added expense.

      Fondly,

      CD

    1. Post
      Author

      It most certainly is, but that’s where finance unchecked (like capitalism unchecked) has the potential to fall short.

      We’ve all seen folks that excel in a single axis of life’s multidimensional richness. Most of us would not trade places.

  2. Have you considered camper living? Your itinerary includes 5 domestic destinations, meaning you can haul your home around for 6 months and park near LA for 6 months. Parked in LA you can then fly in and out to international destinations. Monthly RV park rent is dramatically cheaper than an apartment. It doesn’t solve your furniture storage issue but you may save enough to simply sell the furniture and repurchase at a later date once the flurry of travel is over. On a per year basis my guess is you can save a boatload over the course of 10 years of travel while still checking off the list.

    Travel IMHO is becoming more problematic as world politics and economies deteriorate. I’ve thought about the expat route and considered Chile which I thought ideal all the way to last week etc etc. In the US we hitch ourselves to our economy, elsewhere we hitch ourselves to their economy. In 2015 I bought BTC exactly for this reason. In Greece every thing was frozen, no credit cards, no bank cards, no checks. You were limited to $50/day withdrawal and no way to buy a ticket on a plane home. If you owned BTC you had a medium of exchange beyond bank control. Worse that could happen is you expand domestic travel and shrink international if you own an RV without much impact on the balance sheet.

    The other thing is you may think you have roots but roots is relative to the position you hold in the community. Once retired and flitting around the world you will not hold the same relative position and your rationale for staying put may evaporate. When doing a trade always consider the exit strategies. You may find in those 10 years post retirement:

    How does it feel?
    How does it feel?
    To be without a home?
    Like a complete unknown?
    Like a rolling stone?

    In retirement you will need to reinvent yourself and so will your wife. Completely do-able but it needs to be completely intentional and balanced.

    1. Post
      Author

      It’s fascinating to me how certain themes re-emerge, Gasem. I have been writing to Dr. S from Docs Who Cut Back #17, and she similarly considers black swan scenarios that have the potential to create systemic failures in her financial planning.

      Without giving too much away, Dr. S comes from an immigrant background that lost everything to political instability two generations ago, and has decided to hedge against political instability by allocating a small percentage of the portfolio to gold similar to your hedge with BTC.

      The RV is an interesting housing hedge, and one that could potentially be compatible with desired travel, although anticipating the increasing hassle with age, I am “saving” domestic travel for later years (perhaps erroneously). I figure I’ll only become more of a prima donna as I age, so go for the less comfortable travel now while I can.

      The topic of roots as pertaining to status is an interesting concept – I tend to reduce the “Doctor” title among peers because I find what they are doing to be fascinating (finance; music composition; weighing the ethics of accounting principles; assuming the responsibility for home schooling). Yet it is certain that my status would be reduced through routine periods of absence. I’ll have to chew on that one.

      Fondly,

      CD

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