This thread is inspired by a forum member that I met during the meetup controversy back in February. I wasn't able to find a thread on the forum regarding this topic so I'd figure I'd start one.
There are several considerations that I'm thinking of, both personal and societal, in writing this;
- Right now I have roughly $25,000 in life savings, no debts, and a career (in the military) that pays about $70,000/yr. I'm able to save about 25% of my after-tax income. I pulled all my money out of my mutual funds the Friday before Black Monday 2015, when the Dow Jones opened down over 1,000 pts, and it's sitting right now in USD, appreciating versus the CAD.
- My parents are pressuring me into buying my mother's condo (that she rents out) in Calgary, and using it as rental income (as well as to, supposedly, claim primary residence in Alberta even if I'm posted to Nova Scotia for tax purposes.) Like everyone else in Canada, they've both bought wholesale into the real estate mania that's metastasized in this country.
- I'm convinced that both global stock markets and the Canadian real estate market are on the verge of a severe correction. Indeed, it's already started in Calgary.
- I'm increasingly coming to the realization that I don't want the military to define the entirety of my life, and I definitely would like the ability to live location-independently. My obligatory service ends in 2020, at which point I'll be free to walk away. I'll be 27 at that point.
So here's a thought about a potentially viable path to location independence that I could see for myself:
- Wait for the Canadian housing market and stock markets to significantly correct. (In my opinion, a severe global economic contraction of the type we're facing will do that to both.)
- Buy the property from my mother at its depressed value (which could, by some estimates, be up to 50% from its high point.)
- Pay off the mortgage as fast as possible.
- Take out a HELOC loan against the property, then use that to invest in a corrected stock market, focusing on high-dividend and blue-chip stocks. Supplement by renting out the condo for income. (Mom has already offered to manage the property.)
- Live off the investment income, somewhere where the cost of living is significantly less than in Canada (basically, anywhere I'd want to live.)
The forum member that inspired this post managed to achieve location independence for himself by using precisely this method. I've never had much of an innate entrepreneurial spirit, so the prospect of creating my own business I find, frankly, daunting. But I have an economics degree and I follow financial and economic news religiously.
It's definitely risky, sure. But everything good in life is. And I know it can be done successfully, as I've recounted above.
What do you guys think?
There are several considerations that I'm thinking of, both personal and societal, in writing this;
- Right now I have roughly $25,000 in life savings, no debts, and a career (in the military) that pays about $70,000/yr. I'm able to save about 25% of my after-tax income. I pulled all my money out of my mutual funds the Friday before Black Monday 2015, when the Dow Jones opened down over 1,000 pts, and it's sitting right now in USD, appreciating versus the CAD.
- My parents are pressuring me into buying my mother's condo (that she rents out) in Calgary, and using it as rental income (as well as to, supposedly, claim primary residence in Alberta even if I'm posted to Nova Scotia for tax purposes.) Like everyone else in Canada, they've both bought wholesale into the real estate mania that's metastasized in this country.
- I'm convinced that both global stock markets and the Canadian real estate market are on the verge of a severe correction. Indeed, it's already started in Calgary.
- I'm increasingly coming to the realization that I don't want the military to define the entirety of my life, and I definitely would like the ability to live location-independently. My obligatory service ends in 2020, at which point I'll be free to walk away. I'll be 27 at that point.
So here's a thought about a potentially viable path to location independence that I could see for myself:
- Wait for the Canadian housing market and stock markets to significantly correct. (In my opinion, a severe global economic contraction of the type we're facing will do that to both.)
- Buy the property from my mother at its depressed value (which could, by some estimates, be up to 50% from its high point.)
- Pay off the mortgage as fast as possible.
- Take out a HELOC loan against the property, then use that to invest in a corrected stock market, focusing on high-dividend and blue-chip stocks. Supplement by renting out the condo for income. (Mom has already offered to manage the property.)
- Live off the investment income, somewhere where the cost of living is significantly less than in Canada (basically, anywhere I'd want to live.)
The forum member that inspired this post managed to achieve location independence for himself by using precisely this method. I've never had much of an innate entrepreneurial spirit, so the prospect of creating my own business I find, frankly, daunting. But I have an economics degree and I follow financial and economic news religiously.
It's definitely risky, sure. But everything good in life is. And I know it can be done successfully, as I've recounted above.
What do you guys think?
HSLD