Taking a Break from Financial Independence

Over the past few months I have taken a break from financial independence. I looked into the mirror and realized my destination of FI was missing the mark.  I would read many of the popular blogs that have reached FI and the inspiration of attaining this goal seemed like I was missing the big picture.  I needed a break, maybe just to smell the flowers.

Break From Saving Money, Now You Just Sound Absurd

Over the last few months I have gotten away from writing and in some ways financial independence.  After having some unexpected water damage, loss of rental income, and a small rehab project the money has been going out the door more than it has been coming in.

We treat our rental income completely seperate from our day to day income, so any rental income that has come in has been going right back out.  During this break from FI, we obtained more debt through a home equity line of credit or HELOC.

Based on the numbers we might have been able to swing taking the rental income and making payments towards paying the contractor large amounts of money.  Add making purchases at every big box store or online retailer and the decision to go into debt/obtain additional financing made sense.

Slowing Down Financial Independence

Our plan coming into this year was to make additional payments to our owner-occupied home when the 5 year home ownership PMI requirement (part of our 203K Home Mortgage) came due our August 2017 payment would be light the better part of $200 per month.

The rest of the year we would plow the additional rental income (now $200 more) into the stock market.  Instead the additional payments mostly never happened.  Less rental income, additional expenses from the house, and rehab project sent that money into new LED lighting, tile floors, windows, etc.

The HELOC did still save us the $200 plus in PMI as we took out the amount needed to reach the 78% LTV and as of our August payment.  This was just a transfer of debt, but it did save not only the monthly PMI but also a 6 month introductory rate savings of close to 2% and time of closing the interest rate was almost identical to our fixed rate mortgage rate (HELOC is variable, our mortgage is a fixed rate).

That is the lemonade in this updated slow crawl to FI.  Today we have additional debt equivalent to 6 months of net rental income and additional 2 months of net rental income currently on a credit card (this amount is paid off every billing cycle).  Not to mention our Florida insurance and taxes that will be due all before the end of the year, which amounts to another 3 months worth of net rental income.

Setting our plan of adding additional money into the stock market from rental income missing almost 11 months worth of contributions.  All numbers are approximate and this does not include if the entire HELOC would be paid off adding an additional 6 months bringing the total to 17 months.

More lemonade talk.  Again these numbers are estimates as part of our net rental income actually takes into account a monthly deduction of Florida taxes and insurance and also home maintenance or an emergency house fund of sorts.  We have not received rental income from a portion of the Chicago building as it was vacant or being repaired or we were living in the unit, which will also bring the net rental income up and thus the 17 months could turn back into a 12 month.

Rent the House Forever, Sell the House Very Soon

Our plan or Blueprint for financial independence has always included a Coach Chad Carson or Afford Anything stream of rental income.  Only recently have we decided to slow down on paying off our Chicago owner occupied rental (and now more so because of the last paragraph, funny how that works).

Florida has always been on the mind for Mrs. Even Steven as that is where family is located and where she would like to live.  One of the hang ups of my initial Blueprint for us was that we would use Chicago as a home base.  This home would be income producing and give us the opportunity to have some sort of balance with travel and adventure.

As you can probably see I missed the mark in my financial decision to include Mrs. Even Steven in her dreams for her version of financial independence, but it was just a starting point.  The question that has been talked about ad naseum on our weekend morning walks to the park is do we rent the house if and now when we move to Florida?

We have always had 3 choices:

  • Rent the Chicago house and move to Florida (long distance landlords)
  • Same as above except only on a 3 year basis, using the IRS tax code to our advantage and selling within the time frame to receive a joint tax exclusion of up to $500,000 (Publication 523)
  • Sell the house before we move avoid the long distance landlord and any tax benefit loss if we chose to rent the house for longer than the IRS allows

As we recently moved back into our MTV Cribs style home, does mentioning MTV Cribs make me sound old?  We realized that now may be the very best time to sell our Chicago home.  The last few months have essentially been a live-in fix and flip as we updated our unit and the garden unit.  This would allow us to take our “paper equity gain” into a real cash monies gain on the house and have a result of completely debt free including the mortgage.

It’s an interesting decision to make and one that will be coming up sooner rather than later.

Don’t Give Up, Don’t Ever Give Up

After recently reading The War of Art, available at your local library and paid for with your cities property tax dollars, I realized that one of the struggles I face is of course “Resistance” and a major theme of the book aforementioned.  Over time I have made excuses or put my energy elsewhere instead of my primary focus and many other forms of resistance.  I like to write from time to time and even wrote about sports during this down time from the blog.  It’s about being interested in your topics and putting in the work, except it can’t be work it needs to be interesting and fun.

Who knows, maybe I lost the interesting and the fun.  Either way I want Even Steven Money to live forever and sip out of the very fountains of youth, I did visit St. Augustine, Florida after all so why can’t it be possible.

I don’t know what road I am taking but I do know I am still travelling to get there.  Along the road I realized a few things about blogging and my relationship with my website:

  • I don’t like social media, not for myself or for my website
  • I am in a very good place financially, especially from where I once was, why do I care about making money on my website.
  • I’m anonymous but I want to be more personal with my blog, even more than my real name is Steven.

These are just a couple of things I have been asking myself and there is more.  I don’t know for sure where the website is going, I do know that I am putting together a plan on what’s important to me and Even Steven Money has yet to be crossed off the list and that’s a good sign.

I hope to be back soon………….

8 Responses to “Taking a Break from Financial Independence

  • Good to have you back. And I think it is perfectly normal to veer off a little bit. I mean I am focusing more on savings than paying off debt at the moment and you have an interesting conundrum with the house. I hope your Florida house was ok with Irma. In terms of selling the Chicago house I guess it comes down to (at least for me) how comfortable you think you are with FI. I mean you seem to be ok with the mortgage, but it can be a hassle. How much do you want to be out from under it? When you listed the 3 choices you put forth I thought about 2 or 3. The advantage of 2 is you can get a couple of years of rental income while you adjust to Florida. The advantage of 3 is that you are totally debt free and some more money to add to your FI pot. You can use that money to see how you can get going with whatever stuff you have other there. No matter what I look forward to your next post.
    Jason recently posted…My Interview with My Strategic DollarMy Profile

    • EvenStevenMoney
      3 days ago

      Thanks Jason. Irma didn’t structurally damage the home, but did damage fencing, trees, landscaping, etc. so overall we were happy nothing bad happened.

      Yeah I think it’s going to be an adjustment to whichever option we choose. We literally go back and forth and it always helps when things are going well rather than renting/fixing/etc.

      Glad to hear savings are kicking into gear, it’s always a personal choice on those matters. I personally don’t believe the $$ are that different as long as focus is used in either.

  • Whatever you decide, folks will respect the choice. Some habits are only around for a season. That does not mean they did not serve you in their time.

    • EvenStevenMoney
      2 weeks ago

      It’s been a good break and I have learned a great deal, that is all I can ask.

  • Treat FI as a journey rather than a destination. You need to enjoy along the way too. Nothing wrong with stepping back a bit and figuring out what’s important in your life.

  • Hey Steven, it will all work out. There are always ups and downs in life (and life’s finances), but you’ve worked hard so that you are more robust to the hardships than you’ve ever been in the past! Like I think we talked about one time, leveraged real estate has opportunity for high rewards, but at higher risk than some other options, but since you’re better than at even-steven, you just have to get through the rough spots! I wish you good fortune going forward! You’ve learned the habits and thought processes to make you a rich person, regardless of the timescale. A break is a great time to evaluate what will bring you true happiness in life.

    • EvenStevenMoney
      2 weeks ago

      Thanks Coffee Mike as my wife now calls you…..idk what you are now though, haha.

      Love this last line “A break is a great time to evaluate what will bring you true happiness in life.” Finding that out and also figuring out it can change with each passing moment!

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