The American public wants to reduce housing expenses at a time when it costs money just to breathe. Housing costs (owning and renting) have shot through the roof.
At the same time, finding steady work with full benefits and a path to promotions is much more challenging. What are we to do?
Well, we can buy a destination RV and live on dividends. This solution may be much more viable than you may think. Let’s explore.
Dating with Dividends
What is a Destination RV? A destination RV is a transportable apartment with all the amenities one craves.
My wife and I bought a 2024 Forest River Puma 402LFT, a massive Destination RV. It’s insane! You can check it out in this YouTube video.
We didn’t play around with it until Christmas 2024 when my parents came down. We then gave them our master bedroom and moved into the Puma.
We learned a lot about the RV in those three weeks because we weren’t RV people. In fact, this is the first RV we have ever owned or even entertained owning.
Is it possible to live in a Destination RV? Yes, a destination RV is better living than most small apartments. However, you must check in with your state’s zoning (living) laws. Florida frowns on RV living, for example.
Becoming an Entrepreneur #4
Next, you must account for electricity, water, propane, and sewage. My wife and I learned firsthand how important it is to know your RV inside and out.
- Electricity. We used an extension cord from our house to provide 120 VAC, which recharges the battery. To fully use the air conditioners, refrigerators, washing machine, dryer, and microwave, we would need to install a 50 amp hookup. However, we still had lights, a TV, ceiling fans, a water pump, and outlets.
- Water. There are two ways to inject water into the RV, through the water tank or by leaving your water hose connected (and running). We kept refilling the tank. We took long showers in the RV, but that would use about one-third of the tank.
- Propane. We needed propane for the gas heater and water heater. The refrigerator also can run on propane (but I wouldn’t recommend it).
- Sewage. You must find a place to dump the black water from the toilets. Luckily, our property has a massive septic tank. However, you must be careful not to contaminate the tank with RV chemicals that could disrupt the bacteria. Gray water from the sink is easy to remove on our land.
The RV’s living space was excellent. It has a master bedroom, a living room, and a second-story loft. We never felt cramped, except for two people taking a shower at once. The bathroom, in general, is a little small, and we are small people.
Bond Investing in Your 60s
For longer stays, I would upgrade the king-size mattress in the master bedroom and add a TV. We also bought some space heaters, which came in handy in the winter.
We will eventually install a 50-amp hookup, but it is not a priority. At the moment, we are hyper-focused on growing our dividend income.
Living on dividends. RV living is best when you live on passive income. This cash flow gives you the opportunity to truly enjoy your environment without going in and out of work.
My favorite type of passive income is dividends. My wife and I earn $2,400/month in dividends and continue to add more cash flow into the pot.
Our near-term goal is to earn $5,000/month in dividends. Hopefully, we can achieve this goal in about two more years. Now, let’s look at the cost of living in an RV.
Homeownership Will Only be for the Rich
Our Puma costs $75,000, and we pay $700/month for twenty years. We plan to pay it off early after we reach our dividend goals.
We own three acres of land under our primary residence, which is a quick win. However, if you don’t own land, you’ll need to factor that cost in.
Buying land is more expensive than buying a home because the bank considers it an investment. You will not get the lowest rates and must pay it off in 15 years.
After getting the land, you’ll need to ensure you get a septic tank and a 50-amp hookup. Hopefully, your land has nearby electricity poles, or you’ll pay to run those lines.
I would guess that you’ll need about $150,000 (in certain parts of the US) for the destination RV, land, and connections. That’s not a bad price, especially considering you’ll live in luxury.
Retiring to a Small City and Living on Passive Income
Doing the math. Let’s say you have $500,000 of equity in your California home. You decide to sell and walk away without having to pay taxes.
You pay $150,000 for the land, RV, and connections. You now have $350,000 to invest in dividends. Let’s see how that looks.
I can invest $350,000 in income-investing products and receive $36,000 annually in dividends. You may not feel comfortable with closed-end funds, preferred shares, and business development companies. To each their own.
Passive Income is the Only Chance at Happiness
At $36,000 annually, we would receive $3,000 in monthly dividends. Let’s review the estimated expenses for living in the RV.
Electricity would cost about $100/month here in Florida (my guess), and water and trash would cost about $60. I would not get insurance on the RV; I would self-insure.
The RV has a TV antenna, so streaming channels are unnecessary. For about $200/month, you could add a cell phone and internet bundle from AT&T (T) or Verizon (VZ).
Altogether, I would round up to $500/month in bills and incidentals (like registration and property tax). That leaves us a considerable chunk of cash flow from our dividends.
Time in Money #3: Investing
Putting it all together. Hopefully, you will have additional income from a pension, 401 (K), or social security, giving you even more income.
You then need to add your car, food, and entertainment budgets to the mix. However, you will still be in good shape.
I predict you could reinvest at least $1,000 back into the dividend portfolio, ensuring that you continue giving yourself raises every year.
Is it possible to live on passive income? Yes. I am doing it now. I retired at age 42, and my wife at age 39. We live on passive income from a military pension, dividends, royalties, and rents.
Our lifestyle isn’t as clean-cut as the one we just discussed because we have kids in the home. We live in a 2,500-square-foot house with many people inside, which is expensive.
The $5 Per Week Dividend Investor
However, I see the appeal of living in a destination RV with just my wife and me. One day, my son and his family may take over the primary residence, and kick us out into the RV. That wouldn’t be such a bad thing.
Conclusion. The goal of this article is to give you options. If property taxes and insurance are making you uncomfortable in your state, you may need to make a change.
These Destination RVs are becoming simply amazing. They have everything that you can dream of inside. All you need to do is add the land and utilities.
I love the idea of downsizing. My wife and I don’t need all this space except for the kids. We are willing to give it up and downsize into an RV. It would be a cleansing experience—financially and spiritually. Good Luck!
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