January was a perfect example of our seasonal life. Maybe it’s from growing up in wheat and cattle country, but I’ve never cared for each month to feel exactly like the last month. I love the ebb and flow of the seasons. I love to work on certain projects in certain months and then switch gears. Too much of anything burns me out, even vacations. It’s part of the reason a standard 9-5 job was always lackluster for me. I hated doing the exact same thing week after week, 50 weeks a year.
One of my favorite mentoring questions is about the “Ideal Day”. (If you sign up for my newsletter, you can get all three of my life planning conversations sheets!) Partly because I think it’s important to not only know what your ideal day and week look like, but also how you would structure a year. How many weeks of travel are right for you? How many weeks of big projects? Weeks of recreation or rest? Do you want a few weeks of gardening? What about a week or two each year for a house/car/hobby project?
In this mini-retirement, we have been able to test out and try different “ideal year” schedules to find what fits the best for our family.
Some people say, “I’d love to retire early so I can travel a lot.” Or “I would never retire early because I love working.” Or even more vague, “I’d just love to do whatever I want to do.”
One of my favorite things to watch is when people go through the mentoring questions in my courses or in the 1-on-1 mentoring and say, “Oh, actually being as THIS is what we want, there are a whole bunch of different options to get the exact life we want!!!” Once we get clear on the outcome we are looking for, the path to get there starts to make more sense as well.
Here’s a quick recap of what our last year looked like.
June: Gardening, two weeks resting at the beach and with friends (I spent a lot of time thinking and planning, it filled my creative cup up).
July: Renovation project
August: Fun adventures and travel to see family
Sept: Creating! After months of thinking and planning, I was SO excited to create some of those things. (I built two online courses.)
Oct: Creating and travel
Dec: Preparing for a launch and family
Jan: Rest, fun, and people.
February will be more rest and chatting with people. I’m going through the mini-retirement course with a group and having fun chatting with them. I also opened up my mentoring program and am talking every week with those folks. I love doing that deeper work with people where we chat every week and see significant progress in an area.
March and April will be a few house projects and creating some new content.
May and June we are traveling! 11 national parks in 7 states. It’s these times that are my most creative. Road trips, hiking and being outdoors is what fills up my creative energy and makes me excited to hunker down in the winter and make things happen. Each night in the camper I will take a few pages of notes.
That is about our perfect year. If I were to change anything for next year, I would add a two week trip to someplace sunny and warm in January or February. And a retreat or creative workshop with a small group in October or November.
Monthly Spending: $2189
Giving this month: $326. Being as our giving comes from its own Giving Fund, instead of our passive income, I decided to start showing it here instead of in our pie chart to make that easier to read.
Year to date giving: $326
January was a time for rest and connecting. For my birthday gift (Hello, 35!) my parents offered to watch all our kids overnight (twice!) which is about the best birthday gift ever! So we cashed in some credit card rewards and booked a night at my favorite resort Whitefish Lake Lodge. We ate out (which we rarely do because, with all 5 kids, that just isn’t enjoyable!). We worked through the very conversation sheets I wrote while soaking in the indoor and outdoor hot tubs. =)
Total Cost: $175 (We used some credit card reward so our out of pocket cost was lower)
Adam went skiing! I broke my toe in January. =( And I’ve missed out so far. Hopefully in February.
He owns his ski gear and gets 50% off the day pass with his military discount!
Total Cost: $50
In my commitment to spend more time connecting this year (online and offline), we bought a 10 punch pass to a hot springs that expires in 6 months. So we are committed! It’s a 90-minute drive away, so we have been dropping the kids off at school or childcare and heading for a 3-hour soak before we need to be home. But it’s about the most beautiful drive. I love getting that quiet time with Adam so I’d do this drive even if there wasn’t the amazing hot springs at the end.
Being from Montana, I’ve probably seen 10,000 deer. But they are so dang cute in the winter, I still want to stop and take a picture. SO fluffy!
Total Cost: $70 for the 10 punch pass, $30 in childcare per trip
Add in 14 days of someone in our house being sick, and that was January for us. =)
I started a new category in our monthly expenses to see how we are doing on our “work optional” life as we continue with our mini-retirement.
- Can we really just do a bit of work that we love, instead of going back to the 9-5 grind?
- Can we focus on things we find interesting and best leverages our skills or passion instead of just things that pay the most?
- Can we work/volunteer and actually still have space for the rest of our life, like family time, travel and long days at the lake?
- If people don’t have 1 million + net worth, how do average folks piece this thing together to create their most meaningful life?
5 Bucket Method
If you are just tuning in around here, here is the lay of our financial land. We use a 5 bucket system. It’s extremely useful for anyone trying to custom design their life. It’s perfect if you want to take a year off to travel, try to launch a side hustle into a full business, go part-time at work for a few years, or retire early.
Depending on your situation and goals, you would customize these buckets to meet your needs.
Bucket 1: Fixed Passive Income
Rentals: $1200 a month after all expenses
Military Retirement Pension: $1450 a month
Total Monthly Passive: $2650
We use bucket 1 to cover all our basic living expenses. All passive income that is “fixed” goes here: rentals, pensions, loan repayments, royalties or anything you have little choice if you “pull” from it or not.
Bucket 2: Cash Buffer
Cash buffer: About $50,000 (this includes our Giving Fund, which funds our charitable giving each month and our Rental Fund.)
- We use this bucket to fill the gap in our basic expenses if needed.
- We give donations from this bucket.
- We also use it for one-time large purchases or emergencies.
Bucket 3: Investments
Our investments don’t go into our passive income bucket because when you are creating a flexible lifestyle early on, these buckets might function very differently.
Because we don’t need to tap this bucket yet, we will continue to let compound interest to do its thing. We might also fill it with some extra money from bucket 4 (side hustle) at some point.
$733 a month right now with 4% withdrawal.
In 10 years our investments would provide an additional $1,583 in monthly income, growing at 8% to $475,000 with a 4% withdrawal.
That isn’t to say that we will use it in that way. Investments provide a host of options because it’s one of many buckets.
- We might pull a lump sum to purchase other rentals.
- We might use 2% in 6 years as our expenses grow (bigger kids, bigger food bills).
- If we use it for “extras” instead of basic living expenses, we might pull 5-6%, knowing that in low market years we wouldn’t pull any money from it or only 1-2%. For example, when it grows to $300,000, we might pull $15,000 (5%) one year to take a 3 month trip to Europe. If the next year, a big market drop happens, we might pull $3,000 (1%) to take a 6 week US camping trip.
Bucket 4: Side Hustle/Lifestyle Business
This bucket would include any extra income you produce. If you are growing a business, that income would go here. As would a profitable hobby, income producing passion project, or side hustle.
I met another online creator recently. Jake creates maps for national parks and sells them on his site and in stores. We chat when we run into each other at the coffee shop.
He made an interesting observation the other day: “Well, you aren’t really retired because of the books you read. Retired people don’t read these books.” I kind of get it. Who reads business, marketing, entrepreneur, or writing books for fun? Apparently, I do. Because I love it. I said to him, “Well, I need to fill my days with something.” I love these books, I love these ideas, and it’s more fun to learn about if you have a bit of skin in the creating game. It can be fun to be a consumer: to read the books, blogs, listen to the podcasts and take the classes. But for me, it’s even more enjoyable if I get to test out all the things I’m learning.
I solving hard problems and having things come together. Then the icing on the cake is watching people’s lives, businesses and trajectories change right before my eyes. And I got to be a small part of that. I can hardly imagine anything more satisfying that than.
The decorations on the icing? I have the coolest group of friends now. I talked about that being the biggest benefit of blogging in my 6-month blogging recap. It’s still true. I’ve gotten to know people who are creating, building, changing the world around them, serving people well, making art, and just thrilled to use every creative muscle they have.
I know most bloggers are more excited to share their blog income as it grows and is more impressive. I’m not sure I want to do a full blog income report (something that would actually be helpful) so I’ve hesitated to throw out numbers without context the last few months. But here is where things have been.
January Lifestyle Business Income: $4,917
I didn’t do any freelance work this month. The income came from 4 things.
Mini-Retirements Mastered Course: $240 (currently closed)
Custom Mentoring: $1750
Idea to Launch// Product or Service Mentoring: $2500 (Only available to my email subscribers right now)
So far I’ve reinvested 100% of the income this blog has generated: conferences, mentors, software, classes, books, courses, gear, freelance help and tools to create better things and help grow my audience. Some might see “business expenses” as boring. But for me, it’s an awfully fun way for me to reinvest the money. Paying for email, teachable hosting, credit card fees and web hosting… is less fun. But those things run me under $200 a month.
Bucket 5: Future Passive Income
Rental Mortgage 1 payoff: + $189 a month
$38,000 balance on rental house 1. There are 25 years left on this mortgage. The interest rate is 2.85%.
Rental Mortgage 2 payoff: +$512 a month
$95,000 balance on rental house 2. There are 27 years left on this mortgage. The interest rate is 4.35%.
We might pay these off earlier to increase our monthly passive income.
Social Security: Who knows?
My current assumption is that there will be a small amount of money that will start around age 70. I’ll start more carefully considering this in about 20 years. Right now I have it earmarked as extra money for health care costs or vacations with grandkids.
Conclusion: Mini-retirement for life. =)
I absolutely love what we are doing right now. I love the ebb and flow of our days and months. I love writing. I love working with people in the courses. I LOVE the mentoring. I love creating things. I love the flexibility. I love the travel. I love the ability to go soak in hot springs in the middle of the week. I love the emails and hearing how people’s lives are changing. I love being able to workout with Adam 6 hours a week at the gym and it not decimating our family time.
Our moving target: doing exactly the right amount of all the stuff we love and is important to us. No matter if it’s family time, traveling, writing, mentoring, gardening, renovations, hiking, creating, volunteering or hanging out with friends. It’s all just stuff we love. =)