Episode 3 – A Ten Year Financial Plan

I forewarned you that we are long-range planners.

As we start this Ted and I are, respectively, 64 and 62 years old. Our health is decent, our finances in good shape, we adore each other, and we both really want this to work. Our ideal scenario involves 10 to 12 years of travel, followed by a graceful retreat into an active “adult lifestyle” residence, with a ton of memories and stories to share.

Side note: my much-loved and always candid brother-in-law, who is 76 now, thinks I am being ridiculous, because he and my sister-in-law are still active travellers. In fact, he’s been giving me a pretty hard time about our plan. All I can say is we’ll revisit it when the time comes, but everyone’s plan needs to be uniquely their own.

Because we’ve been pipe-dreaming this so long, we’ve also been planning for the possibilities if we were lucky enough to be able to afford them when the time finally came. In the 40 since years our original dream of 365 day per year hotel stays, the internet has become available to virtually everyone, travel companies catering to just about every imaginable demographic, interest and experience – from backpacking between hostels to luxurious river cruising and culinary vacations – have flourished, and most significantly for us companies like HomeAway/VRBO and Airbnb were created to allow travellers to share “homes” around the globe.

It only took two really great VRBO exchanges (and maybe a hundred hours after that lost on the web exploring the thousands of options out there!) to convince us that most of our stays would be in “home” settings. We like our privacy. I enjoy cooking most of our meals. Having our own laundry facilities means we can pack lighter. When we’re in North America we will drive between destinations, making the road trip part of the fun, and can choose homes that have a safe place to park our car (I love my little Mercedes GLA 250, which will now need to hold all our possessions except paperwork – more about that later). Staying in one place for a month or more at a time allows us to unpack, sleep in when we want, and explore at a leisurely pace, whether that exploration is museums and historic sites, or markets and grocery stores. Renting a home suitable for two adults is usually cheaper than a nice hotel too, and will give us the option of renting larger spaces for times when we’d like our family to join us.

This might be a good time to talk about budgeting the dream.

When Ted (who was the major breadwinner) retired, we crunched the numbers to determine an annual “income” that would allow us to live comfortably in our condo. He had a partial pension along with self-directed RRSP funds. I knew what my fixed pension from 27 years working in support roles in the school system would be. We had some money inherited from my parents and safely invested. When we sold our condo, we added those proceeds to our investments. We own a condo downtown that son #1 and his family rent from us. Now we just needed to determine an affordable annual budget that factored in living expenses and – hopefully – vacations. Making the decision not to have a static year-round residence allows us to combine those 2 elements into a single budget line, since we will not be paying rent on an empty residence holding our “stuff” while we are elsewhere.

That said, for the first couple of years we will be paying to store a few large furniture items, dishes and cookware and some family memorabilia. If our plan goes well for 2 years we are prepared to divest ourselves of all the stored items, giving items to our kids, selling others, and donating the rest. Paying for storage beyond a couple of years would mean we’d start to pay more in storage than the cost of replacing items should we decide to settle down again.

We also need a place to store paperwork: wills, personal documents, and 7 years of income tax forms and financial information. Bank safety deposit boxes are too small for that much physical paper, and we were not (yet) prepared to scan it all for electronic storage. For now, son #2 will maintain a locked filing cabinet for us, allowing us to access items when we are in Canada, and him to access it for us if we need it while out of the country. The next step will be scanning all of it to “the cloud”.

So…. the working budget we had in place before deciding to turn nomadic will now need to carry us around the world. In our case we were paying $2500 per month in rent for a 2 bedroom urban condo, including internet access and utilities. That $30,000 plus our existing budgets for one annual vacation, budget, food, car maintenance/fuel, and entertainment (restaurants, event/entry tickets) totals $54,400 net per year. That’s $4533 per month. $149 per day. All numbers in Canadian dollars, so we will constantly need to factor in exchange rates. You can see right away that we can’t live in hotels the way we once hoped and also eat…. not to mention getting on planes and trains….but we are at a point in our lives where “roughing it” is not an option we will even consider. (Full disclosure. Roughing it never was an option. My travel accommodation criteria was always having a bathroom at least as nice as the one I was leaving at home.). Using VRBO and Airbnb for our lodgings is going to help us make it work.

At the end of year one, after reviewing my trusty Excel spreadsheets, I’ll let you know how our budget played out vs our actual expenses.