Although I’ll be working for a few months into 2013, I decided last year that in 2013 we would invest my salary and live off of dividends, child support and rental income throughout 2013 as a test run for ______? Sabbatical? Early retirement? Alternate employment? Self employment? Not really sure what’s coming down the pipeline frankly but the options will be open and I’ll have the time to figure it out.
To get to where I could manage that, I did a few things:
- cut the over-payments on the mortgage
- cancelled some unnecessary cell phone charges
- re-jigged investments in my taxable account towards dividend payers to bump up the yield closer to 7%
- saved an additional $106,410 in the taxable account last year
- signed up for an Amex card (thanks Joe!) to help defray Xmas costs
- still have to cancel the cable and landline – not because I think TV is evil – just sort of boring, but because we don’t watch it and I don’t know how to get the box off the wall without wrecking things (do cable companies do that deliberately?)
And then stuff life happened. Life to the tune of ~$600/month:
- dividend cuts
- dividends eliminated
- child support cut
Back to the drawing board – or cutting board in this case. I still think we can make it without dipping into the travel or renovation fund but it’s going to be tight. At this point, it’s almost a personal challenge of ingenuity.
But the kids have got my back. When I told my youngest son about the budget revisions, here were his suggestions:
- eat down the pantry (good idea! the split pea soup is in the slow cooker right now)
- set a limit of $40/week on the grocery run
- buy a good bottle so he can make his own smoothies instead of having overpriced yogurt drinks
- buy a ton of groceries in December
Maybe I should just work longer or quit drinking. 
Nah, I’ll get on that cable box ASAP.
For me,living without a pay cheque was weird at first, but I got use to the situation after awhile.
When I proved I could actually do it and got use to the new cash flow,it was kinda liberating.
Financial independence put into practice.
Good luck with your test run.
Well I do hope not much “luck” is involved.
It is odd though to feel that before this, I was presumably financially “there” – but never really felt “there” until I had the dividend stream in place. I don’t think I’m one of those that could draw 4% every year without a bit of anxiety. I have to know that something is literally coming in – like dividends. Maybe that will change, I don’t know.
No one has my back and that is the terrifying part. My sons are both struggling with post-secondary school expenses so there is only me.
Working toward more emergency savings and increasing my income with a second job so that I will not worry so much because no one knows what the future will bring.
Jane Savers @ The Money Puzzle recently posted..Maybe I Should Get A Mortgage?
Jane – that’s what made me decide to save – and work 2 jobs at times – because there was nobody to depend on but me. And I hear you on the not wanting to worry. I’d prefer to never have to think about money, except for how to invest it better or something.
Interesting idea. If you can pull it off, it surely would allow you to rack up the retirement savings, and fast!
Are you planning to live in your present dwelling after you quit working once & for all? If that’s the case, it might be worth using your salary to pay off the mortgage, instead. The monthly payback on a paid-off house = the amount of your mortgage payments. When you get laid off your job, the payoff is a roof over your head that can’t easily be taken away from you.
Funny about Money recently posted..A Show and a Nice Day
Hi Funny,
No, I don’t want to live here long-term but it’s a great place to have a job and make a stash. There’s a couple of things that I’m trying to consider – that I expect a big up-turn in the economy here where I live around 2015 and that’s when I want to sell. So I’d rather not have the cash held up and I need the time off to finish up my renovations. I just can’t work full time at a demanding job and come home and do it. The other is that right now, the sector that I mostly invest in is at a super good point to be throwing new cash into it. If I couldn’t see better investing opportunities out there than paying off a 3.4% mortgage, I would opt for paying off the mortgage, but…
My concern is with my youngest son who is in grade 7 now. I don’t want to disrupt his education but I think it might be okay for him to live somewhere else with the natural transition to high school in 2 1/2 years. Which pretty much works out to the timing of when I hope to sell.
But I would also like to help my oldest son buy a property here as well while the real estate market is still relatively low. If I have to work some more to do that, I think it’s worth it. So I don’t rule out working a bit in 2014 or even 2015 – if I can pick up a decent short term contract.
Sigh… so many balls to juggle when you have kids to consider.