Live Free Recipe

This post is about creating the freedom to choose how you spend your weekdays.

Owning a place to live, and being paid to live there, will change your life beyond the financial benefit it brings.

What’s it going to take?


Capital

I outlined the educational aspects here.

The easiest time to build capital is in your 20s. You can live very cheaply because you’re either at work, or carousing. Your health insurance is peanuts and you don’t need to take on any dependents (free birth control saves lives).

Age is not a barrier. Use the recipe below and you can be living free by 2030.


Big Cities remain the best places to build experience, knowledge, contacts and skills.

When I made partner, a wise man took me out to breakfast and reminded me…

Get what you want, then get out

He didn’t tell me why I needed to get out. I learned that for myself…

  • You’ll be tempted to go private with educating your kids => $1 million you need not spend, or earn
  • You’ll be jammed into a little place and/or you’ll have your financial life tied up in a single asset – you won’t care about this after graduation, you will care about this when you have preschoolers!
  • It requires extreme luck to get yourself on the housing ladder before you’re 40 => get your timing wrong and you’ll feel trapped
  • You will be surrounded by social pressure to spend, spend, spend!

Megacities are filled with opportunity and excellent people to whom you sell your skills.

Megacities are a great place to start.

Just remember to leave.


Target Location

Having played this game three times, I think a small city is your best bet.

  • ~250,000 (pop.) in a county with ~500,000 (pop.)
  • Natural Beauty – clean water, clean air, the ability to exercise safely without driving
  • Climate – I gamed this by having a rental in the Northern Hemisphere and a low-cost Home Base in the Southern Hemisphere. Later in life, I moved to a place I didn’t need to leave (Colorado, Front Range)
  • Airport Proximity – needing to take a flight-to-your-flight will get old

Before my first kid was born, I worked in: Canada, England, Hong Kong, New Zealand, Bermuda and Scotland.

The skills to be happy somewhere are the same as the skills to be happy anywhere.


Target Property

My worst deals (financially) have been the most impressive (visually).

Buy space and let the next owner spend a fortune in renovations. The money I’ve spent beyond paint, carpets and replacing worn out appliances/HVAC has been largely wasted.

You’ve probably spent the last decade renting – your younger self is your target market. Choose a location that will be easy to rent (if you leave, if you need income).

Lock off basements, detached units, split floors… earn rental income, maintain personal privacy.

Margin of Safety – your land premium is “total price” less “value of the buildings” – the closer you get the land premium to zero, the safer your deal.

Coming out of the Great Recession of 2008, land premium was briefly negative – this was due to banks foreclosing and forcing the market down. Five bedroom houses, 15 minutes from Boulder, were selling at $75 per sq foot. Condos, apartments and houses in Arizona got even cheaper, under $50 per sq. foot.

Cheap will happen again.


Connection

It can be tempting to go remote. I feel ya.

Escapism is a recurring dream of mine, especially in times of stress. However, you need to be practical – friends, sexual partners, basic services, transport… the practicalities of life.

The purpose of setting up your low-cost base is to provide security within a life with meaning. Go to where there are people with whom you’d want to spend the rest of your life.

Shared values, within an active lifestyle.


Wait For The Fat Pitch

To get this done you’re going to need a trigger that makes the local property market seem cheap to YOU. It won’t seem cheap to the locals, who will be expecting further declines.

  • Recession combined with High Interest Rates (UK 1990)
  • Asian Crisis (1997)
  • Currency Crisis (NZD in 2000)
  • Global Financial Meltdown (2008)

I witnessed all of the above. There is ALWAYS a “next crisis”.

2020 was a boom year in real estate. When you’re living through a boom, your FOMO will be pushing you to take action.

One of the best things your first good deal brings you is a reduction in the pressure to do a deal.

To do great deals, you need to be comfortable doing no deals.

You Have A Choice


The picture above explains my athletic journey better than all my writings combined.

When I was in the middle, personal excellence was beyond my comprehension.

If you can sustain transformation in ANY area of your life, you have the skills to take yourself most anywhere you’d like to go.


My favorite lesson about marriage comes from a close friend.

What does it take to have a great marriage?

A willingness to do whatever it takes to have a great marriage.

This lesson applies across every domain in my life.



Whatcha doing?

I thought I might cook, clean and do laundry while the kids stare at screens…

…every day for the next decade.



Back in 2019, I decided to change the way our house was run.

First step was to burn our ships. I cut loose all our staff. COVID arrived five months later and there was no going back!

Second step was to figure out how to do it myself. It took me 20 hours to clean the house the first time I tried. Days!

Roll forward 15 months, and we have the place looking great by 8am each Sunday.

How’d we do it? I used a little psychology.

It’s not going to make sense for me to spend 20 hours a week (1,000 annual hours) cleaning. I think a lot of folks probably tap out at this point. I certainly wanted to quit.

I told myself that I only had to do it for 6 months. I gave myself the freedom to quit later, just not this week.

Note: I was tempted to quit before I’d learned the basics.

Coach Molina once told me to “give it three years” before I made any decisions about whether I was making progress!

While I was “not quitting” I reduced my cleaning time to 7 hours a week. Skills.

I noticed I made a lot less mess. Incentives.

I also noticed the rest of the family made less mess. Social Pressure.

Skills, incentives & social pressure.

Part of the reason my first few times took so long is our cleaners didn’t have the same incentives as we do. I was paying money to live in a house that wasn’t very clean.

Nobody has the same incentive to sort your life, your health, your finances… than you.


The struggle is real… I’d just asked her to put some dishes away.

Next, I asked each kid to “take one job” => specific, personal responsibility.

15 months later => I’m at 4 weekly-hours => a HUGE reduction from my baseline, my kids are learning how to take care of themselves and we save ~$10K per annum.

A superior outcome for a “problem” I was going to solve by hiring a House Manager.

  • $50,000 annual swing
  • A decade until our youngest graduates high school
  • Avoided by 4 hours a week
  • Compounding at 5% is $625,000

My goal is not to get my life to the point where I stare at a screen all day and have others take care of me => enabling my kids to live that life would be a disservice to them and, strangely, no better for me.

The goal is to live as I’d wish for my kids, and you.


Next time, we talk money => specifically, how I went from the lowest paid person in the building (1990/1991) to owning a house, that paid for itself (2001).

If last week’s financial discussion seemed impossible => I’ll break it down for you.