I’ve been on a roll recently preaching about the housing affordability crunch. Owning a home in the US will soon be out of reach for the average person. I wrote three articles in short succession that capture my feelings:
- Rental Takeover: Have Investors Overtaken Your Neighborhood?
- On The Sidelines: Will the Housing Market Crash?
- Home Buying for the Average Person
Today, I want to give you other options if you’re going to live the American dream. Most people envision a house in a lovely suburb, a couple of kids, a couple of cars, a couple of pets, and a bbq grill.
Again, this scenario will be out of reach for most Americans and their children if we don’t start rethinking our finances. If we are willing to sacrifice a few things, mainly location, we can have it all: life, liberty, and the pursuit of happiness.
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Three different options. Today, I have three alternative options: living overseas, building a homestead, and moving to a small US town. All three have pros and cons, but one thing ties them together—passive income.
Yes, that’s right. Passive income will play a vital role in these endeavors. Why? These locations won’t have high-paying jobs. We aren’t going to go overseas and make $120,000/year.
We need to BYOI or Bring Your Own Income. The idea is to bring our income to these locations. If we can get a good chunk of passive income, we can live like kings and queens. How much passive income we bring depends on how we want to live.
Let’s take a quick look at these alternative lifestyles and see how they compare. In the end, I’ll give out some passive income numbers to consider. Let’s begin.
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Living overseas on passive income. My wife and I want to move abroad at some point. We will keep our permanent residence in America, but we want to spend a reasonable amount of time in Turkey.
Working overseas won’t be an option that is available to us. I read the book “An Expat’s Experience Living in Turkey” to get an idea of the lifestyle. Yikes. If you don’t know what you are doing, you can get yourself in trouble working in Turkey.
Thus, we need to bring in our own US dollars. Luckily, we have been planning our life over there for over three years, and our passive income journey is coming along nicely. I write an entire series with our plans in mind.
- Living Overseas Passively 101: Introduction
- Living Overseas Passively 102: Financial Mindset
- Living Overseas Passively 103: Retirement Income
- Living Overseas Passively 104: Dividend Income
- Living Overseas Passively 105: Rental Income
- Living Overseas Passively 106: Royalty Income
- Living Overseas Passively 107: Cryptocurrencies
- Living Overseas Passively 108: Automated Business
- Living Overseas Passively 109: Cash & Emergency Fund
- Living Overseas Passively 110: Living Overseas on Passive Income
Homesteading. You can homestead anywhere—even in the city. For today’s article, let’s focus on getting an excellent plot of land about ten miles away from the city.
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Sure, you could probably continue to work in the city, but homesteading takes time. Plus, you want to enjoy your garden, farm, and animals, right? Also, we can still keep many of the luxuries we love, such as city power, city sewage, and the internet.
We can also make money on our homestead. We can continue growing our financial nest egg by bringing in our own passive income and working with nature. I wrote a series about making money off the land.
- From Dirt to Dividends 1: Gardening & Preferred Shares
- From Dirt to Dividends 2: Livestock & Closed-End Funds
- From Dirt to Dividends 3: Insects & Business Development Companies
- From Dirt to Dividends 4: Community Farming & Mortgage REITs
- From Dirt to Dividends 5: Composting & Dividend ETFs
Moving to a small US town. Moving to a small city is another great option for most people. The idea is to TAP your home equity from a major city and use the cash to buy a home outright.
For example, we could take $300,000 of home equity from San Diego, California, and buy a great house in Gulfport, Mississippi. You could stay in America and not have a home payment.
Budget vs. Fixed Income
You can combine this with house hacking and buy a home with a detached mother-in-law dwelling. Now, you have no mortgage and rental income on your land. You can also add a mobile home, RV hook-ups, or storage shed to generate more rental income.
Which option is better? Please read all the accompanying articles to get a full view of three different options. As you can guess, all options are vastly unique and provide great opportunities to build wealth and happiness.
Living overseas is an excellent option if you love to travel and meet new people while living vastly below your means.
If you love living on the Earth, and growing your own food and resources while practicing sustainable living, then homesteading is a beautiful option.
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If you love all the trapping of America but want to have financial freedom, moving to a small US town is a tremendous opportunity.
How much passive income does each option require? To be safe, I would bring in at least $6,000/month in passive income to each option. This may seem like overkill, or it may seem like not enough, depending on the eye of the beholder.
I personally prefer to bring in $20,000/month anywhere I settle. I don’t ever want to worry about money, so that’s my minimum number. Your number is up to you.
Ensure you are doing your research on the various locations. Living overseas has many drawbacks like quick changes in living conditions (a coup).
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You have control of your homestead, but there are many government regulations on rainwater and electricity usage. Moving to a small US town is a great option, but you would need to pay off your home to live comfortably on $6,000/month.
Conclusion. This article serves as an introduction to alternative living. Moving forward, we can have deeper conversations about building wealth while living these alternative lifestyles.
Overall, the main idea is to work hard in the city. Find a good job while saving and investing. Also, start building an online business or creating content.
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You can then take your dividend portfolio, businesses, audience, and rental income and move to somewhere that will improve your finances and quality of life.
This lifestyle also gives your children the chance to experience something other than the city. My best childhood moments were not in San Diego but in a small town called Blythe, California.
Your homework is to start researching overseas locations that interest you, places you can afford land, or small cities you find attractive. Begin putting together solid data points and looking over your passive income needs. This early research will prove invaluable on your journey. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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