Perhaps one of the sad realities of life is that dreams generally remain locked in a closet somewhere as the daily grind takes over. Years pass, the fat accumulates around the midsection, and you wonder if you will ever get the "big break." Fortunately, if you save that money, stick to your plan, and pursue your goal with relentless focus, it is possible to stop dreaming and start living.
From the first moment I set foot on a sailboat, I dreamed of sailing the oceans, visiting distant ports, seeing exotic lands. My problem, however, was that when my goal met financial reality, it could only remain a distant dream. I had just finished college; I needed to buy a car and repay student loans, and everything I owned could fit in a duffel bag and guitar case. To make matters worse, I had limited knowledge of financial matters, and The Motley Fool did not yet exist to provide the guidance I needed.
For 15 years I dreamt of sailing away. So, I am happy to report that last month, my wife and I finally untied the dock lines in Richmond, Calif., sailed under the Golden Gate Bridge, and headed south for Mexico. So far, we have completed the first 400 miles, during which we have seen countless dolphins, whales, seals, sea otters, and sea lions. We are resting and making some repairs in Southern California before continuing, which has given me time to reflect on the key factors that made living our dream possible.
Save that money
A certain degree of financial independence is required to achieve most of life's goals. For most of us, this can only be achieved by having a disciplined savings plan. Our plan was simple: Don't buy anything (except the boat, of course). Fellow Fool Seth Jayson revealed the real retirement secret -- saving that money -- a few months ago. Seth's plan involved cutting the everyday expenses like restaurants and premium cable TV.
In our case, we focused on the big-ticket items. We chose to rent a cheap apartment instead of paying through the nose for a tiny California starter home. We shared one small car. We ate at home almost all the time, and never carried credit card debt. Our furniture was modest, and when friends and family would visit they would say things like, "Is this all you have?" My sister once asked if we were still living in "that tiny apartment." (Note to my sister: The apartment was huge compared to the boat.) For six years, we saved every penny we could and maintained our comfortable, if minimal, standard of living.
Stubbornness beyond all reason
My family arrived in America from Finland about 100 years ago. The Finnish word "sisu" can be translated as "stubbornness beyond all reason" or "persistence even when all hope is lost." Many Finns credit sisu for holding off the Soviets during the Winter War of 1940. In our case, the boat required immense amounts of money and work. Without a constant focus and stubborn determination, we would have remained tied to the dock forever.
While the sailing life began as my dream, I was fortunate that my wife also wanted to travel to distant ports and adopted the dream as well. It doesn't take too much ciphering to figure out that two incomes are better than one; however, the ciphering breaks down when the two parties fail to work together. We set our level of expenditures at the lower of our two salaries. This allowed us to take risks pursuing bigger opportunities. I often used the analogy of climbing a ladder. As soon as one of us was stable, the other would reach for the next rung. When our efforts met with success, we socked away the cash and tried to advance to the next level.
Cash flow is king
Perhaps the greatest key to our early departure (age 37) is that we will be able to maintain positive cash flow. This is because once the boat is paid for, voyaging is actually quite cheap -- many sailors report spending less than $1,500 a month. Therefore, while our income has taken a big hit, we will continue working and saving, while living our dream.
Eventually, we hope our savings will build until the earnings from our portfolio exceed our expenditures. Robert Brokamp recently highlighted the right stocks for retirement, focusing on dividend-paying companies like Vodafone
Finally, it is easy to get caught up in the numbers, worrying about whether or not you have enough money to live your dream. Eventually, you just have to go out and do it. If you want to sail, go sailing. If you want to live in the countryside, move to the countryside. If you want to have kids . well, you get the point. Somewhere along the line, you have to stop dreaming and start living.
Not retired yet
We don't view our journey as retirement -- it is more like a working sabbatical. But getting away from the daily grind has me thinking about what life could look like in the coming decades. One resource I have been turning to frequently is The Motley Fool's Rule Your Retirement service. For example, our multiple retirement accounts are in dire need of simplification. In the current issue, there is an interview with financial journalist Scott Burns, who discusses his "Couch Potato" portfolio of index funds and what he believes is a good mix going into the future.
We are also thinking about what to do when our sabbatical ends. A few months ago, Robert Brokamp interviewed Bob Clyatt, the author of "Work Less, Live More." Mr. Clyatt discussed how it may be possible for many people to retire early simply by downsizing from the high-income, high-expense life in the city, and pursuing work they enjoy in a simple setting in a small town or rural area.
Furthermore, we have a long-term need to ensure we have adequate savings for retirement, health care, and insurance. Rule Your Retirement is packed with resources for calculating retirement needs, and information regarding everything from asset allocation to changes in Medicare Part B. Sign up for a free trial today to find out all that this wonderful service has to offer, and then let's pick a port of call to meet and swap tales of the sea.
Vodafone is an Inside Value pick.
Fool contributor Robert Aronen does not own shares of any company mentioned. A few nights ago, he felt incredibly lucky. He sailed through a moonlit night with dolphins creating green streaks of bioluminescence in their wakes. The next day, his marine toilet broke, leaving him elbow-deep in a nasty repair job. He now feels lucky and nauseous. The Fool's disclosure policy bobs along at peace.