A Plan for Early Retirement
contributed by KM
Tips for Avoiding Early Retirement Scams
When my husband and I were in our early/mid 30's with 3 young children and very little savings, we built our first house in a new and growing rural subdivision. At the time, it was several miles from nearby cities, so land was about half the cost of that in town. My husband did much of the actual building, but sub-contracted out those jobs he did not, or could not, do by himself. For example, we needed a crew to frame in the house and a contractor to grade the land.
Ten years later, we purchased a small parcel of land at auction in a rural area about ten miles from where we lived. Buying land at auction can be very economical, but that's another story. The bank was willing to loan us the amount needed to build, partially based on the projected rent of our present home. (This house still had a large loan against it.) We planned to depend on rental income to help us retire early. We only borrowed enough to complete the house with an unfinished walkout basement. (My husband chose a lot that was slightly hilly, so one end and most of the back of the house is entirely above ground level.)
Again, my husband built the house himself on a part-time basis. When the upstairs was finished, we moved in and rented our former home. With our own money (no loan), and using all means of frugality in acquiring materials, we finished off our new downstairs into two nice apartments, which we subsequently rented out. The rental income from our first house and both apartments in our new house was enough to cover payments on both houses.
We didn't stop there. As time and money permitted, we were able over the next five years to build a second building on our 2 1/2 acres. It was a large shop for my husband with a compact, but nice, three-bedroom and two-bath apartment upstairs, which we now rent out.
Maybe our story will open up some possibilities for others. This was all part of our plan to be able to retire early with extra income.
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