It’s been 2 months now since we moved into our humble home in rural Tasmania and began our adventures in off-grid living.
Time for another update to our financial freedom journey!
What a busy period, with lots of adjustments – work, lifestyle, home life, finances, remote business running – just about everything really. 🙂
Unpacking into our new life
Before the dreaded unpacking, we camped in our little cottage for two weeks while the floors were re-done. I wouldn’t recommend it, but the floors look great.
We also had a wood heater installed, which makes for a cosy winter night with a glass of red or a tasty craft beer. The first night we ran the heater I worried we might burn the house down while we slept (we’re Queenslanders after all!). Now we’re chopping wood like maniacs and drinking more red wine than ever. Something about those flickering flames… 🙂
Cheap and cheerful $100 DIY reno
We love a DIY reno and also completed a cheap and cheerful do-over of the once ghastly pink study.
To make the standing desk for two, we bought $45 worth of timber and hinges and built two trestle legs. We then repurposed a beautiful, heavy timber barn door from the kitchen into a gigantic desktop. Add some crisp white paint to the walls and ceiling and voila! The room is perfect, with a picture window so pretty it’s a dangerous distraction from blogging.
The study is where I work when it’s raining out, which it almost always is in Tasmania!
We’ve had to pinch ourselves a lot in these last two months. We feel like we’ve stumbled into a huge slice of luck to be living here. But then, I’m a firm believer that luck is the meeting of preparation and opportunity. And our financial freedom was a journey we started 8 years ago…
We’ve met our curious cow neighbours and our thin Queensland blood has proudly survived the winter frost and a late spring snow.
Urban life to off-grid living – what has the transition been like?
One welcome adjustments and part of our financial freedom plan has been our move to off-grid living.
I confess, we’re not entirely off grid. We do have power lines. But we are off-grid for our water, waste water, septic, rubbish and 80% of our heating. For these life-time urban dwellers, it’s been a fun and a learning experience. So what exactly do we do differently now?
We manage our own water supply
Our water doesn’t just turn up at the tap as it does with urban living. It’s on us to make sure we have enough water and that it’s sufficiently clean to use and drink. We run two water pumps and two ‘pump and gravity fed’ rainwater tanks. The water is not clean enough for our liking so we have ordered a whole-house water filter to be installed before the main pump to clean up the water supply to the house. We double filter our drinking water through a Dolton tier one drinking water filter inside this cute and custom pot-belly pottery urn.
In return for our efforts, our variable water cost is zero. Our infrastructure costs are sunk and contained (no water utility to put up the fixed cost component of the water bill). And we don’t complain about the rain.. 🙂
We heat our home ourselves
We had 5m3 of dry timber delivered just after the wood heater was installed. Wow. That ended up being a lot of timber! We were stacking it for days inside our shed. Two months in, we’ve used about 1/4 of our timber supply. At $120/m3 delivered plus fire starters, we’re paying $90 per month for whole of house heating.
We live with less waste, more sustainably
Here’s a revelation for you. There’s no curb-side rubbish collection in the middle of rural nowhere. Who’d have thought.
This means that we have to take our rubbish for a drive to the transfer station each week. As we are putting it in the car, we find we are way more careful about what goes into our bins. We compost our kitchen waste. We recycle everything, especially paper and cardboard into our heating supplies. We live more consciously about our waste, and more sustainably because of it.
The same concept applies to our septic and grey water. We don’t use toxic chemicals down the loo, the sink or for cleaning. This keeps our septic system healthy and respects the surrounding farmland where our grey water filters.
We are rewarded for doing these things with much lower Council rates and a satisfying sense of living more lightly on the land.
We’re more self reliant
The transition to running our own systems hasn’t been hard. There’s no noticeable difference in the quality of the essential services that we now provide ourselves. But we do feel more self reliant and prepared for any future.
And that was a big part of our ‘Plan B’; a plan to rely less on centralised systems for our own well being.
Our next step off the grid will be uninterrupted power supply, and to build a growing tunnel for home-raised fruit and veg. So much to do and learn, this retiring from a wage earner job thing sure is hella busy! 🙂
That’s all great Tara, but now show me the money, right!
Our net worth has grown by just under $55k in the September quarter, mostly due to cryptocurrency and some superannuation gains. We also added a new ‘digital assets’ category to our portfolio. This covers off the websites and domains we own. Property still makes up the largest share of our personal wealth. We also continue to hold more cash than our emergency fund rules require as we didn’t make large investments during the quarter.
Our good debt position hasn’t changed as we have interest only loans on our investment properties. Bad debt remains at under $10,000. We funded our move in cottage renovations with cash that we had put away because the home cost less than we had budgeted. Oh, and some sweat equity!
September quarter income
Our Airbnb income this quarter was down on expectations thanks to two weeks of lock-downs in August. We’re not complaining because we know pandemic lock downs have driven many tourism businesses to the wall.
To manage this risk ongoing, we’ve been building up a business emergency fund for our Property Management business. It’s a strategy we’re using for peace of mind that we can ride through the uncertainties of living with a pandemic. We didn’t have to draw down on that fund in August, which we are grateful for.
If you’re wondering how expenses might change with your financial freedom, here’s what ours now look like. We live on around $3000 per month – less than half of what we lived on in Brisbane! With lower living costs, our money goes further. This geo-arbitrage strategy has helped bring forward our financial freedom date by years. It should definitely be on your radar if you’re open to it.
Not counted in our living costs is the capital we put into setting up our cottage – $36,000 from savings. This included:
- new floors throughout
- wood heater supply and install
- NBN wireless connection and phone signal booster antenna
- DIY study renovation
- a new doorway to bring the stunning mountain views into the loungeroom,
- some new large appliances and yard equipment
- additional kitchen cabinetry
- water filter systems
- Snake mesh fencing – which we’ve half installed
- Ikea shelving for the study
- new blinds, which have yet to arrive.
Savvy spenders, not frugalistas
Our largest expense by far this quarter was food. We’ve spent more than usual to stock up our fridge and deep freezer. Rent comes in second but it’s all from July, before we had our new home. Happily, we’re no longer paying rent.
While we’re living on about $750 per we, we’re not practicing frugality. We still go out and eat out every weekend. We’ve been on a weekend trip to Launceston and a couple of day trips. It’s just that, where we live means we don’t ‘incidentally’ spend money on things like Uber, take out and coffees. It’s much easier not to consume blindly when the shops are a 35 minute drive away… This too has been intentional.
Our savings rate
Because our income was down this quarter, our savings rate also dipped from July’s 75%.
We still managed a healthy 52%. You can check out how much you need to be saving to win your own financial freedom right here.
In July, we said out next investment would be a rooftop solar system, which we expected to give us a return of around 20% each year. We haven’t had solar installed because it rains a lot in Tasmania. We still intend to go solar and hope we can get it installed over summer and take another big step in our off-grid living adventure.
In September we did invest some fiat currency we had sitting on the sidelines into three Layer 1 crypto projects. These investments are already paying off.
We also made a small investment during the quarter into a US based innovation ETF with a very savvy fund manager. We’ll reveal all in a post at some stage. But first, back to the off-grid living thing – there’s wood to be chopped!